The potential of driving may cost you $8. 50 a hour if Volkswagen follows through on its boardroom musings.
The German automaker is considering charging an hourly fee for access to autonomous driving features once those features are prepared. The business is also researching a selection of subscription attributes for its electric vehicles, including”range or performance” increases that can be purchased on an hourly or daily basis, stated Thomas Ulbrich, a Volkswagen board member, into the German newspaper Die Welt. Ulbrich reported the initial subscription attributes will show up in the next quarter of 2022 in automobiles based on Volkswagen’s MEB platform, which underpins the company’s new ID.3 compact car and ID.4 crossover.
The executive said that Volkswagen will also provide video games from cars, similar to Tesla’s arcade. “In the charging breaks, even if they only last 15 minutes, we want to offer customers something,” Ulbrich said. He said the automaker would not be developing the matches themselves, and it’s not clear whether they’ll come preinstalled or be available for purchase through a program store.
Volkswagen’s real moneymaker may be autonomous driving, however. “In autonomous driving, we can imagine that we switch it on by the hour. We assume a price of around seven euros per hour. So if you don’t want to drive yourself for three hours, you can do it for 21 euros,” said Klaus Zellmer, chief sales officer of the Volkswagen brand.
In a swipe Tesla, he said that charging hourly fees, VW would make autonomous driving more reachable than”a car with a five-digit surcharge.”
That’s not to say Volkswagen is not hoping to make serious money off the subscriptions. In general, Zellmer stated he anticipates the subscriptions will gradually create the company hundreds of millions of euros in extra revenue.
Over the past couple of years, Volkswagen has given an increasing amount of focus on the software that goes into its own vehicles. In 2019, the company established an effort to enhance its software. At the time, across all VW Group brands, the company had eight distinct digital architectures. For an automaker that prides itself on developing a handful of mechanical systems it could tweak to match different segments, that diversity of architectures was inefficient and wasteful. VW Group merged all its software departments into one internal team, which changed its title to Cariad in November.
“Cariad is extremely important for our future in the group,” Ulbrich said. “As a brand, the unit develops the basis for future electric cars. This allows us to focus on software for the vehicle and applications for customers.”
Willingness to pay
Automakers have been salivating over the notion of subscription revenue for ages. As more attributes in vehicles are handled through software, the thought of flipping a switch to enable or disable them has grown increasingly more appealing. And after watching software companies make the switch, it is not surprising that car companies are taking significant actions to bake subscriptions in their offerings.
Volkswagen isn’t the first car company to mull subscriptions or after-sales purchases. Tesla once offered Model S cars with a 75 kWh battery which has been software-restricted to output 60 or 70 kWh, depending on when the car was bought. In the instance of the 70 kWh models, clients could pay $3,250 to unlock the last 9. 33 percentage. More recently, Telsa temporarily unlocked additional range in those and other versions to provide customers affected by hurricanes and wildfires extra juice to drive to safety.
BMW notably charged an $80-per-year subscription for CarPlay in its own 2019 versions. It was a deal for lessees, who saved $60 over a three-year rental compared with purchasing the feature . But the subscription also meant that BM