Mercedes-Benz Earned US$1.6B from Subscription Services in 2022

Carmakers are banking on in-car subscription services. Just last year, Mercedes-Benz made around US$1.6 billion from software-enabled services.

For instance, in the USA, drivers of their EQ fully electric models can opt to pay an extra US$1,200 for  year of increased acceleration. In Australia, several Mercedes services are unlocked for a fee, including navigation, remote engine start and even racing lap times.

Of course, 1.6 billion is but a fraction of the US$150 billion global earnings that the German carmaker made in 2022. But in another 10 years, Mercedes expects subscriptions to be one of its top revenue channels.

Microtransactions are insidiously making their way throughout the car industry. Essentially, owners are forced to pay a monthly or annual fee to unlock capabilities that are already available in the vehicle that they purchase. It’s like buying a 3-bedroom house and only being given the key to the third room if you pay a recurring fee, and to have the lock of that bedroom door changed if you stopped.

Volkswagen made the news recently when they (or rather, their third-party service provider, so they claim) refused to provide tracking data of a stolen vehicle with a child inside until the service fee was paid.

What else can we expect to pay for in the future? Pay-per-use windshield wipers, perhaps? A monthly fee for more effective braking? An annual subscription for airbags that work? What this writer dreads is the day when these are accepted as the norm.

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