In a world where car manufacturers are increasingly exploring subscription-based software features, Audi appears to be following the trend despite the backlash faced by rivals. Unlike BMW, which abandoned its heated seat subscription program due to public outrage, Audi is doubling down on offering more paid software options in its upcoming vehicle generation.
Audi introduced over-the-air features through its myAudi app, including functions like automated parking and lock-unlock light animations, akin to “microtransactions” from the gaming world, designed to generate additional customer revenue This approach has garnered comparisons to “horse armor” but for cars. Audi’s board representative for technical development, Oliver Hoffmann, revealed to Autocar that the company intends to expand its lineup of “on-demand” features.
Hoffmann explained, “With our next generation of electronic architecture, we will bring more offers to ‘function on demand,’ and you will see year by year we will bring new functions in the cars.” He stated that this move is in response to customer demand and represents a significant step forward for the company. “This is a [big] step. I think there is a demand from the customer to bring new functions in the car, and this is a profit pool for us—but we don’t see these revenue pools with this kind of functionality.”
While Hoffmann did not disclose specific features, he emphasized that paid, downloadable features will become the norm. Audi has already instituted paywalls for some climate control functions in select markets. Other automakers like Honda, Toyota, and Cadillac might set precedents for what Audi may monetize.
The introduction of paid software features is expected to become a significant revenue stream for the automotive industry in the years ahead. Stellantis, for instance, anticipates generating $22.5 billion in revenue from software features by 2030. However, customers have started pushing back against these additional charges, with some resorting to “jailbreaking” their cars to unlock features for free.
While automakers remain resolute in their decision to monetize new features, it’s becoming evident that many customers are reluctant to pay for subscription services in their vehicles. As prices continue to escalate, a breaking point may be on the horizon, with the burden falling on customers’ wallets being the likely casualty.