Automakers turn to software upgrades to conserve cash

0

BMW says customers who have already paid for heated seats are not affected by this new policy, and the company does not offer pay-to-play functionality in the US market. But BMW drivers in the United States can buy software that enables remote engine starting from a smartphone app, and another program that automatically records a 360-degree video of the area around the car after an accident.

For more than a century, we’ve viewed a car as a machine with features and capabilities built in permanently from the factory. But the global automotive industry is embracing a radical new concept: the “software-defined car”. In other words, your car’s capabilities are mostly controlled by bits and bytes, not steel and rubber.

A typical modern vehicle contains around 150 microprocessors running around 100 million lines of software code. It oversees everything from suspension to braking to air conditioning. This digital infrastructure has become the most important component of today’s vehicles. That’s why a shortage of computer chips has led to massive production cuts at automakers around the world. And just this week, car giant Volkswagen’s board fired the company’s chief executive, in part because he failed to fix serious software problems in vehicles. VW.

Since many auto features are software-dependent, owners can add new features to a car years after it leaves the factory, almost as easily as installing new apps on a smartphone. For automakers, this should become a major new source of revenue. Last year, Stellantis, the company that makes Jeep, Chrysler and Dodge vehicles, said it expects software sales to generate $22.5 billion in new revenue by 2030.

Electric car maker Tesla is the best-known provider of paid software upgrades, with its eye-popping $12,000 fee for the most advanced version of its Autopilot Full Self-Driving software. But Tesla owners can also pay $200 to activate the car’s heated rear seats in the company’s Model 3 sedans.

This week, Tesla announced that it will no longer include free lifetime internet connectivity with its new cars. From now on, vehicles will benefit from a free online connection for eight years; after that, owners will have to start paying $10 per month or $99 per year.

Owners of the electric Porsche Taycan can install software for $12 a month that limits the car’s speed and extends its range. Mercedes-Benz’s lavish electric EQS ​​system features integrated rear-wheel steering to help the car corner tighter. But buyers in Germany only get a limited version of this feature, unless they pay around $575 a year for the software to fully activate it, and Chinese owners have to pay an additional $750 for activation. complete. Luckily, US customers get the fully capable version at no extra cost.

General Motors offers Maps+, an enhanced navigation service that can work on GM cars built as early as 2018. The service is offered at no additional cost to drivers already subscribed to GM’s OnStar network, priced at $14.95 and up. But GM is betting that Maps+ will attract a stream of new OnStar subscribers who will find it a better option than the navigation app on their smartphones.

With software-defined cars, buyers can buy a cheaper model with fewer options and then download new features in the future.

“If you’ve owned the vehicle for several years, it’s not always the same car,” said Marc Amblard, former director of global product strategy and planning at French automaker Renault. “The car is evolving.”

But using software to activate unused hardware features, like a heated seat, comes at a cost. The automaker needs to integrate the hardware, without charging the customer, and then hope that a large percentage of car buyers will pay extra for the hardware to be activated. This could lead to losses if too few customers sign up.

Bryan Reimer, a researcher at the Center for Transportation and Logistics at the Massachusetts Institute of Technology, said automakers can actually save money this way because it’s so expensive to build multiple versions of the same car with different specs. material. “The cost to install it is cheaper than the cost to install it in some cars but not others,” Reimer said.

He predicted that more and more cars will come with all available options on board. The buyer can then pay for the software needed to activate some or all of them.

Still, some consumer advocates worry that software-defined cars will put consumers at a disadvantage. Christine Hines, legislative director of the National Association of Consumer Advocates, said, “Manufacturers can turn any new innovation into a subscription. So new security features or energy saving benefits… will become subscription-based and only available to the limited number who are willing and able to pay for it.

For example, South Korean BMW drivers can pay an extra $8 a month or a one-time fee of $183 for a feature that automatically dims the car’s headlights to help oncoming drivers see better. William Wallace, associate director of safety policy for Consumer Reports, said a feature like this, designed to make driving safer, should be available to all drivers, not as a premium option. . “Companies simply shouldn’t be allowed to disable proven security systems,” Wallace said.

And there’s another major hitch – a lot of consumers don’t like the idea. A survey released in April by Cox Automotive found that three-quarters of car buyers don’t want to pay extra to activate extra features. An overwhelming majority of respondents said safety features such as lane assist and automatic braking should be included in the purchase price; an even larger number said the same about heated seats.

Some of these consumers may even be looking for illicit ways to enable software locked features. Online publication Vice recently reported that there is a lively online community of hackers dedicated to unlocking car options without paying the manufacturer a dime.

They’ll likely get plenty of practice, as automakers around the world pledge to make consumers pay for the same car over and over again.


Hiawatha Bray can be contacted at [email protected] Follow him on Twitter @GlobeTechLab.

Share.

Comments are closed.