The subscription-based model for services is coming to the car industry. This means customers will be able to unlock certain services of the car for a fee. The big question is, will the premiums of the tech behind the vehicle be worth it? 

Volkswagen works on subscription-based function-on-demand vehicle software image

Volkswagen will be launching a new platform soon that may adopt that business model. After creating a EV-battery-centered company called PowerCo, they are now also putting up another division to address the future of in-vehicle software. They are also working on new driver features with the new car OS.

Volkswagen works on subscription-based function-on-demand vehicle software image

Enter Cariad. Cariad will focus on the function-on-demand principle of the German car manufacturer’s new in-vehicle software. The new division aims to offer a lot of features as long as the customer is willing to pay a monthly fee. There will be several tiers of the subscription model, an example of this will be the unlocking of the feature to drive autonomously. As Tesla pioneered the large screen infotainment movement, VW and other car brands aim to monetize on the model. 

Volkswagen works on subscription-based function-on-demand vehicle software image

With the future of car companies headed for electrification, software integration has been in development. To put the 'smart' in smart cars, they have been racing towards a model that works flawlessly and is future-proof. What features will they keep from us with the subscription model? Will the customers welcome this if they put a subscription model or do they resist since they are already paying a lot of money for their vehicles?

Source: Bloomberg