Subscription models are commonplace in many areas of daily life. They are now also becoming increasingly popular for vehicle features. Although manufacturers like Tesla and Mercedes have been offering subscriptions for years, it was BMW that first brought the concept to the attention of the general public with a seemingly mundane feature like heated seats.
For years now, Porsche Taycan owners have been able to unlock features like the Intelligent Range Manager or Power Steering Plus through a subscription. The Mercedes-Benz EQS comes standard with 4.5-degree rear-axle steering. However, this can also be increased to 10 degrees via a subscription. And in the Tesla Model 3, where rear seat heating has been available via subscription since 2020, the concept of subscription instead of purchase has long been standard.
For manufacturers, the subscription model opens up new avenues for optimizing revenue and production. While it is true that, in theory, more resources are required in production to equip every car with features such as heated seats as standard, on the other hand, it significantly simplifies production complexity for the automaker.
In addition, the material costs are, of course, lower than what the buyer will later pay to unlock the feature—whether through a one-time payment or a subscription.
The psychological aspect plays a particularly significant role in subscription models. An extra 3,000 euros for modern driver-assistance systems or an extra 500 euros for extended 10-degree rear-axle steering? Many customers would likely pass on these options at first. But once they have the car and know they can unlock these features on a trial basis for 30 or 15 euros a month, their hesitation diminishes, and the likelihood increases that, if they like them, they’ll opt to permanently unlock the optional features with a one-time payment.
Overall, the model is in tune with the times. More and more people no longer want to own a car. Leasing and carsharing are particularly popular in large cities. The subscription model for optional equipment thus caters to the desire for flexibility. Someone who subscribes to a car for six months in the summer simply doesn’t need heated seats. But someone who takes over the vehicle in the winter will most likely book this option—and the heated steering wheel to go with it. The future therefore most likely belongs to the subscription model.
