- Charging for access to heated seats was not well received
- BMW admits it was a mistake but continues exploring subscription models
- More and more companies are turning to microtransactions to increase their profits
BMW sparked controversy in 2022 when it floated the idea of a new ‘Features on Demand’ program, which would charge owners to access pre-installed hardware. In particular, the idea that owners would have to pay a monthly fee to access heated seats caught the attention of many.
The German brand was quick to clarify at the time that if a customer specifies heated seats, they “will remain fully operational for the entire life of the vehicle.” But the company said additional features, such as using existing camera hardware as a dash cam, would still be offered as a premium software subscription.
More recently, BMW head of product communications Alexandra Landers told drive.com.au that introducing the ‘on-demand’ service with a subscription model with a heated seat and steering wheel “is probably not the best way to start”.
However, Landers also defended the model, stating that “you have use of the cloud, and that has a cost” and added that “if you use it, we have to pay for it.” He also confirmed that the company is still exploring the idea of customers wanting to unlock additional features for a fee in the future.
The upcoming iX3, for example, will be available with a 360-degree camera subscription, as well as the Tesla FSD-rival Driving Assistant Pro package, which offers advanced cruise control with automatic lane change and more.
“With these digital offers in place, we offer our customers even more convenience and flexibility according to their individual wishes after purchasing a vehicle,” a BMW spokesperson told The Drive when asked to clarify its position on the matter.
But BMW is not the only manufacturer criticized for offering additional capabilities as a subscription service.
Tesla recently eliminated the ability to pay a one-time fee for its Full Self-Driving system, while General Motors has been charging a fee for its OnStar emergency services for decades.
What’s more, any “constantly connected” car eventually requires payment for a data package; Otherwise, owners must have access to Wi-Fi to perform the simplest software updates.
Like and subscribe
While many consumers are happy to pay a subscription fee for digital services, which are becoming increasingly common in today’s software-defined vehicles, the real outrage came when BMW suggested that owners would have to pay for hardware that is already installed in a vehicle.
The German brand backtracked on that decision, but continues to demand a recurring fee if the owner wants to operate its heated seats and steering wheel remotely. The company argues that there are costs associated with mobile data and cloud storage to cover, but some buyers are not convinced.
However, as vehicles (particularly electric vehicles) become increasingly digitalized, automakers are looking for ways to exploit the potential revenue stream associated with subscription packages.
After all, it’s more lucrative to charge a range of owners a small monthly fee for a service than to offer it as a one-time purchase when the vehicle is first set up.
This also goes hand in hand with the fact that the car ownership model is changing rapidly, with more buyers than ever renting or leasing their vehicles in one form or another.
Buying a car is no longer a massive, one-time investment that is supposed to last for years, but rather adds to the list of monthly expenses consumers have to deal with.
What was right for the original buyer of a vehicle might not be right for the second person who owns it just two years into its life cycle, which is where a Features as a Service model has its benefits.
More than this, if BMW can streamline its manufacturing process by essentially building a single configuration of a model and then charging customers to unlock convenience features, such as a heated steering wheel, it will do just that.
The automotive market is undergoing one of the biggest transformations it has ever seen, while competition is more intense than ever. These microtransactions are seen as a way to smooth out cash flow, and as a result, they’re clearly not going away anytime soon.
Follow TechRadar on Google News and add us as a preferred source to receive news, reviews and opinions from our experts in your feeds. Be sure to click the Follow button!
And of course, you can also follow TechRadar on YouTube and tiktok for news, reviews, unboxings in video form and receive regular updates from us on WhatsApp also.
