Automakers are chasing subscription revenue as if it’s the next gold rush. Mercedes anticipates earning billions from in-car subscriptions. Stellantis has its eye on even more enormous sums, and General Motors is pushing for $25 billion from its software services. On the surface, it sounds like an unstoppable revenue stream. But reality suggests these ambitions may be overstated.
The Harsh Truth About Software Monetization
Software only generates sustainable revenue when it provides immediate, undeniable value. Long-term, low-value subscriptions fail quickly because consumers will not pay indefinitely for features they barely use. The real challenge—often overlooked by automakers—is keeping customers engaged for not just a few weeks but years. Treating software like a mandatory tax that forces drivers into mediocre, unnecessary packages doesn’t foster loyalty or innovation. It feels more like extortion.
A Potential Solution: Pay-As-You-Go Software
Automakers should rethink their revenue models and pivot toward on-demand features. Instead of locking useful technology behind perpetual subscriptions, they can deliver it precisely when drivers need it. This model does two things:
It increases consumer satisfaction by letting people pay only for features they use.
It encourages automakers to continually improve software offerings so that customers want to activate them.
A Real-World Example
Consider a driver named Mahmoud, an automotive enthusiast preparing for a 1,700-kilometer trip from Jeddah to Dubai. He rents an electric SUV and unlocks features on demand:
Highway Autonomy: Enjoys partial self-driving capabilities during long highway stretches, relaxing with peace of mind.
AI-Powered Route Optimisation: Harnesses real-time road data to find the fastest routes, avoid bottlenecks, and auto-book fast-charging stations.
Desert Drive Mode: Activates terrain optimisation for tricky off-road segments near Riyadh.
Satellite Internet and Voice Assistant: This feature allows users to access navigation and communication services even in remote areas without cellular coverage.
Dynamic Insurance Upgrade: Purchases extra coverage solely for this trip.
When Mahmoud arrives in Dubai, he cancels all these services. There are no lingering charges or unused subscriptions—just on-demand value. Next time, if he takes his family to the mountains, he can unlock an entirely different set of features better suited to that journey.
Driving Future Innovation
This flexible, pay-as-you-go approach is the kind of innovation that keeps consumers engaged and satisfied. Instead of demanding blind loyalty, automakers must earn loyalty by offering tangible benefits that adapt to each driver’s needs. Companies that embrace this model will be the ones to thrive in the competitive automotive landscape.
So, which automaker will genuinely be the first to get it right? One thing is sure: whoever offers real value without forcing unwanted subscriptions stands poised to reap the rewards. “Build it, and they will come” has been replaced by “Prove it, and they will pay.”
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Author’s Note:
Automotive software isn’t just another revenue line item—it’s a chance to transform how we drive, travel, and explore. Automakers focusing on customer-centric innovation will discover that the real profit comes from delivering features people genuinely love and use.
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