With the rise of electric vehicles (EVs), manufacturers are finding new ways to make money from digital services. They are locking certain features behind paywalls and forcing consumers to pay extra for services that should come with the vehicle. This trend is growing, and we must raise our voices against it. It’s not just happening with EVs, but they are a prime target because of their software-based design.
In this article, we’ll look at how this trend started, how it’s happening, and why it’s harmful.
The Rise of Digital Services Monetization in Vehicles
In recent years, car manufacturers have started introducing new ways to make money after selling a vehicle. With the increasing digitalization of cars, particularly electric vehicles, manufacturers have found that they can charge customers for software updates and even hardware features.
This means that when you buy a car, you might not get access to everything it can do unless you pay extra. For example, some cars have heated seats, but you can only use them if you subscribe to a monthly service.
This trend harms consumers because they have to pay for hardware already installed in the vehicle. The technology is in the car, but they are being asked to pay more to use it – effectively exploiting customers and turning basic features into additional revenue streams.
Examples of Paywalls in Vehicles
There are many examples of digital services being locked behind paywalls in both electric and internal combustion engine (ICE) vehicles. Let’s take a look at some of them.
Tesla’s Software Paywalls
Tesla is renowned not just for its cutting-edge technology but also for its heavy use of software, which can in some cases lock certain features behind additional costs. Despite the impressive capabilities that come standard with Tesla’s vehicles, some functions remain inaccessible unless drivers are willing to pay extra.
Take the “Full Self-Driving” (FSD) package, for instance. This high-profile feature comes with a hefty price tag of $8,000, and even then, purchasing it doesn’t guarantee free access to future updates or improvements, which could require an additional fee over time. While this might seem steep, it could possibly be seen as reasonable when considering that Tesla continually updates and enhances the FSD system, making it more advanced over time. In this sense, the value of these software improvements can be seen as an ongoing investment in technology that exceeds the car’s original capabilities.
However, there are examples where the extra charges feel less justifiable. Tesla also offers paid upgrades for increased range and acceleration, which allow drivers to unlock more power and efficiency from their existing hardware. For example, the Model 3 Long Range features an Acceleration Boost upgrade, costing $2,000, that reduces the 0-60 mph time by about half a second, from 4.2 seconds to approximately 3.8 seconds . Similarly, Tesla has introduced a range boost option for Model Y RWD owners, offering an upgrade that can extend the vehicle’s range by up to 30 miles for $1,000, or up to 50 miles for $1,600 .
What makes these examples contentious is that these capabilities are already built into the vehicle’s hardware, yet they remain locked unless customers pay extra. As a result, even after investing a substantial amount in a Tesla, owners often find themselves facing further expenses to unlock the full potential of their vehicle.
BMW’s Heated Seats Subscription
In 2022, BMW stirred up significant controversy when it was revealed that the company was charging customers a monthly subscription fee for access to heated seats, even though the necessary hardware was already installed in the vehicle. Instead of offering this feature as a higher trim feature at time of purchase, BMW chose to include the hardware but lock it behind a software paywall, requiring drivers to pay continuously to activate something their car was already equipped with.
This approach drew widespread criticism, as many saw it as a blatant attempt to extract more money from customers for a feature that should have been included in the vehicle’s initial purchase. It serves as a prime example of how automakers are increasingly experimenting with subscription models, even for features that many consider fundamental to the driving experience.
Toyota’s Remote Start Subscription
Toyota caused a stir in 2021 when it was revealed that the remote start function on certain models required an ongoing subscription. This subscription isn’t limited to their electric vehicles; it affects a wide range of Toyota’s lineup, including traditional internal combustion engine (ICE) vehicles such as the Camry, RAV4, and Tacoma.
Even though these vehicles come equipped with the hardware for remote start, Toyota chose to lock this feature behind a paywall after a trial period ends. To continue using it, owners are required to subscribe to Toyota’s “Remote Connect” service, which costs $8 per month or $80 per year. This is another clear example of a car manufacturer charging customers to access features that are already built into their vehicle, regardless of whether it’s an EV or not.
Polestar’s Performance Upgrade Subscription
Polestar, Volvo’s electric vehicle brand, also follows the trend of hiding features behind a paywall. In 2022, Polestar introduced a performance upgrade for the Polestar 2 model. For around $1,200, owners could unlock an additional 67 horsepower, which improves the car’s acceleration. Polestar already had the necessary hardware in the vehicle but charged extra to activate its full potential.
This practice is alarming for customers. They expect the car to perform to its full capability without paying additional fees after purchase.
Mercedes Performance Upgrade Subscription
Mercedes-Benz has joined the growing list of manufacturers offering performance boosts through a subscription model. For an annual fee of $900, Mercedes offers an “Acceleration Increase” feature on EQS 450 models. It unlocks faster acceleration by boosting the vehicle’s torque output.
The hardware is already present in the vehicle, but the company requires drivers to subscribe to unlock this performance boost.
Zero Motorcycles’ Performance Unlocks
The trend of paywalls and subscription-based features has begun to creep into the motorcycling world, and Zero Motorcycles is one of the latest companies to adopt this model. As an electric motorcycle manufacturer, Zero has started locking certain features on its bikes behind software paywalls. Riders are required to pay for software updates to access enhancements like extended range and increased performance, even though the hardware for these capabilities is already present.
This means that customers aren’t getting the full potential of their motorcycles without paying additional fees, which is a clear example of how paywalls are expanding beyond cars and into other sectors of the automotive industry. It highlights the growing concern of manufacturers charging extra to unlock features that customers have technically already purchased.
This Is Not Just an EV Problem
Because of their often software-based design, this trend is common in electric vehicles. But this is not an issue exclusive to EVs. Even internal combustion engine (ICE) vehicles are seeing an increase in digital services that require extra payments.
For example, some ICE vehicles now require a subscription for features like remote start or advanced driver assistance systems (ADAS). This trend is slowly creeping into all types of vehicles, not just EVs. Since EVs rely more on software, they become the prime target for these paywalls.
What’s even more concerning is how this trend is being normalized across the industry, with more manufacturers exploring new ways to monetize features that were once standard or included in the base purchase. For instance, Ford’s “BlueCruise” and GM’s “Super Cruise” systems, which offer hands-free driving and safety features like adaptive cruise control and lane-keeping assistance, are only accessible through subscriptions after an initial trial period. This shift indicates that if left unchecked, the practice of charging for software-locked features could soon become the norm, regardless of the vehicle’s powertrain, making it increasingly difficult for consumers to access the full capabilities of their vehicles without paying recurring fees.
When Is Monetization Acceptable?
The idea of paying for features already in the car seems unfair. Still, there might be some cases where monetization could make sense. For example, if a car manufacturer develops new software features after the car has been sold, it could be acceptable to charge for those updates. Just like smartphone apps or video games offer paid updates for additional content.
In this case, the customer is paying for something new that wasn’t available when they bought the car. As long as the original features work as expected, paying for extra content could be a fair way for companies to charge.
Another acceptable form of monetization is charging for premium services that require ongoing maintenance costs. For example, services like real-time traffic updates or satellite radio require the company to pay for data, so charging customers for these additional services makes sense.
The main point is that if you add something new to the car/bike, you can charge customers for it. Charging for something that already exists in the car, like heated seats or full performance capabilities, is unacceptable.
How We Can Fight Against This Trend
We must push for changes in how companies price their products to stop this trend. Here are a few ways we can work toward a future where what you buy is what you get:
1. Demand Transparency
Car manufacturers should be transparent about what features are included in the vehicle’s base price and what features require extra payments. If customers know upfront that certain features will cost extra, they can decide whether or not to buy the car.
Transparency also means that companies should clearly explain what future updates will cost. So, customers won’t be surprised when they find out they need to pay for a software update to use a feature they thought was included already.
2. Push for Stronger Consumer Protection
Government and consumer groups must push for stronger protections against these bad practices. This should include rules that prevent companies from charging for hardware features already installed in the car.
Regulators should also investigate the use of software updates to unlock features and ensure that companies aren’t using them to extract more money from customers.
3. Support Companies That Offer Fair Pricing
As consumers, we should support companies that offer fair pricing. By buying from companies that don’t lock features behind paywalls, we show that we won’t tolerate these greedy practices.
If enough people refuse to buy cars with paywalls, car manufacturers will be forced to change their strategy.
4. Ask for Open-Source Software
One potential solution to combat paywalls is encouraging the use of open-source software for non-essential vehicle features. Open-source software would allow users to customize and modify certain aspects of their cars without having to pay for manufacturer updates. However, this approach might limit manufacturers’ control over safety, security, and profits.
A balanced compromise could be to keep core systems, such as those related to driving safety and vehicle operation, proprietary. In contrast, non-essential features like infotainment or performance adjustments could be open-source or accessible via APIs. This would allow manufacturers to create a marketplace for third-party apps, giving users more flexibility to personalize their vehicles without compromising critical systems.
To ensure safety and accountability, manufacturers could implement a system where users receive warnings if certain modifications might void their warranties. Additionally, they could offer extended warranties for changes made through approved third-party sources. This approach would provide drivers with more freedom to tailor their vehicles to their preferences while maintaining the necessary safeguards for safety and reliability.
5. Encourage Less Software-Dependent Vehicles
Our favorite solution is encouraging manufacturers to create electric vehicles (EVs) that are less software-dependent. While software can add convenience, many car enthusiasts appreciate the raw, unfiltered driving experience that traditional gas-powered cars offer. By designing EVs that prioritize this simplicity and direct connection with the driving experience, manufacturers could cater to enthusiasts who value freedom and flexibility over the constant connectivity and software-driven features that modern cars often emphasize.
These less software-reliant EVs could strip away unnecessary digital interfaces and over-the-air updates, focusing more on mechanical performance, handling, and driver engagement. One of the biggest benefits of a more analog EV is the ability for drivers to upgrade parts and make tweaks more easily, just as they can with traditional gas cars. Without the restrictions imposed by software controls, enthusiasts would have greater freedom to modify their vehicles, such as upgrading the suspension, brakes, or battery components, and customizing the driving experience to their liking.
By offering such options, manufacturers could strike a balance, providing high-tech, software-driven vehicles for those who want convenience and more stripped-back, driver-centric models for enthusiasts who crave a hands-on, customizable approach to their driving experience.
A Better Future for EVs and All Vehicles
The trend of monetizing digital services is growing, and we should fight against it. Car manufacturers use software-based designs, especially in electric vehicles, to lock features behind paywalls. This harms consumers and goes against the idea that what you buy is what you get.
Sometimes, monetization might make sense, such as paying for new features or premium services. But charging for features that are already in the car is unacceptable. To fight this trend, we need transparency and stronger consumer protections.
Electric vehicles are the future of transportation. They are innovative and offer incredible performance. But if we allow paywalls and subscriptions to take over, companies will take advantage of customers at every opportunity. By protesting against this trend, we can ensure that we are getting the actual benefits of EVs.