German carmaker Volkswagen is considering charging an hourly fee to access autonomous driving features, once they are ready.
The company is also exploring a range of subscription features for its electric cars, including range or performance increases, which can be purchased every hour or every day, company board member Thomas Ulbrich told Germany’s Die Welt newspaper.
Ulbrić said the first subscription features will appear in the second quarter of 2022 in Volkswagen’s self-driving vehicles, which support the company’s new ID.3 and ID.4 crossover.
Volkswagen will also offer video games in cars, similar to Tesla’s Arcade, the CEO said, adding, “In charging interruptions, even if it lasts only 15 minutes, we want to offer customers something.”
He said the automaker would not develop the games himself, and it was not clear whether they would come pre-installed or be available for purchase through the app store.
Volkswagen is considering turning self-driving into a paid service as a new business model for the company with money, with Ulbrich saying, “In self-driving service, we can imagine using it by the hour. Let’s say a price of about 7 euros ($8.5) per hour.”
Klaus Zeller, chief sales officer at Volkswagen, said in a hint to tesla’s biggest competitor that Volkswagen will make self-driving easier and more affordable than buying a car at high cost by charging hourly fees.
Zilmer said he expects the subscriptions to eventually result in additional profits for the company in the hundreds of millions of dollars.
Over the past two years, Volkswagen has devoted a great deal of attention to the software that goes into its cars. In 2019, the company launched updates to simplify its software, integrated all software divisions into one internal group, and changed its name to Cariad last November.
“Cared is very important for the future of the group,” Ulbrich said, “as a brand, it is an important development for future electric cars, allowing us to focus on vehicle-specific software and applications for customers.”
Are you ready to pay for the subscription?
Automakers have been making fun of the idea of subscription revenue for years, but as more features in vehicles are managed through software, the thought of automakers controlling their operation and stopping them through these programs has become a call for rethinking the subscription money-making project. After watching software companies do this work, it is not surprising that car companies are taking serious steps to add subscriptions to their offers.
Volkswagen is not the first car company to consider subscriptions or after-sales purchases, Tesla once offered S-type cars with a 75 kWh battery, which was software-restricted to take out only 60 or 70 kWh, depending on when the car was purchased.
In the case of 70 kWh models, customers can pay $3,250 to unlock the last 9.33% of battery performance.
BMW has in particular imposed a subscription of $80 per year to use CarPlay in its 2019 models. It was a good deal for tenants who saved $60 on a three-year lease, compared to buying the car with the feature.
It remains to be seen whether Volkswagen’s offers will be adopted by consumers. It may be difficult to sell subscriptions for increased performance of the vehicle on an hourly or daily basis, and it will be difficult to return to a lower-performing car the next day.
$8.50 an hour for self-driving allows people to do something other than drive, and for some drivers, overtime is worth it, but it’s going to be harder to decide for most people.