GM is hoping to generate massive profit by offering various software-as-a-service products in its vehicles going forward, which will be delivered to customers through its connected Ultifi software platform. The automaker provided a clearer picture of its SaaS strategy in its Q2 2022 earnings report, outlining plans for Ultifi and its various paid connected features to generate up to $25 billion in revenue annually by as early as 2030.
Ultifi is an in-vehicle software platform that’s being rolled out to certain GM internal combustion engine models and EVs for the 2024 model year. The software will support various paid GM vehicle apps and features and will also support apps from third-party developers and companies. While certain Ultifi apps will be offered by GM, such as paid vehicle comfort and convenience features, the automaker will have a revenue-sharing model for paid apps developed by outside companies.
Thanks to this planned in-vehicle app shop, GM expects to generate between $20 billion and $25 billion USD annually via paid software and services. Alan Wexler, GM’s senior VP of innovation and growth, said previously the automaker’s own internal research indicates that most new vehicle owners would be willing to pay up to $135 per month for various subscription-based apps and features for their vehicle.
Wexler also provided a rough idea of some paid features GM was exploring in an interview with The Detroit Free Press last year. Such products could include a driver-facing camera that would scan the driver’s face and automatically start the vehicle, or a software feature that could automatically close the windows when it detects rain outdoors. Other automakers have explored offering popular vehicle features as subscription services, such as BMW, which offers heated seats via subscription in certain new models.
GM reported $1.7 billion in income on $35.8 billion in revenue in Q2. This represented a 40 percent downturn in income and a 4.7 percent uptick in revenue year-over-year on “higher corporate expenses primarily due to year-over-year mark-to-market changes,” the automaker said.
Paid software features are viewed as a potential new revenue stream for automakers, which are facing mounting costs from components shortages, supply chain snags and shipping setbacks, as well as the shift from ICE vehicles to electrification.
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Comments
No way I’ll pay for apps in a car!
I use my car to drive, you know the concept…
Put me down for 0$ a month until the end of time
This is the way.
Vehicles are more expensive than ever, and you want me to pay a monthly fee, on top of that already inflated price tag, just to use basic comfort and convenience features? I’ll pass.
The car scanning your eyes in order for you to move it. What vehicle provides that feature? Sure isnt a standard option from my perspective.
It’s actually quite intriguing idea. Add some very unique features that no one needs but they’re way cool. Add a $10/month fee for that feature.
Not sure if find enough benefit for that feature but many would and if it provides extra income, I totally get it.
If you don’t want the feature, you don’t have to get it.
That’s true that you don’t have to pay if you don’t want to, then who is paying for the hardwares that enable those “extra monthly fee” feature? The car buyers that’s who.
We already see GMC and Buick tacking on 3 years of Onstar to the sticker price. Not an option, and surely not refundable if you don’t keep the vehicle 3 years. This is going to be similar to the BMW play. Build all the vehicles with all the features so that the manufacturing process is easier and more consistent from unit to unit. Then, charge the owner a monthly fee to use the features like heated seats, heated steering wheel, cooled seats, rain sensing windows and sunroof, etc etc. They will make it so that if you want what would normally be in a fully loaded vehicle, you will have too pay monthly, annually, or lifetime fees to use them.
How much does that hardware cost? And what other features that have been existing already use that hardware?
The laser scan from the steering wheel probably is installed specifically for Super Cruise. In order for super Cruise to work, you need an OnStar subscription which I think is $40/month. Now add the feature to operate the vehicle without any device, maybe for another $15. The more special new features you gotta have, the more the monthly fee. Really no different than your cell phone.
It actually sounds like GM is developing gotta have features that many can’t imagine and will entice people to purchase. Maybe they’re wanting to be more Apple like. Great to see them thinking outside the boat and looking to the future versus focused on the past.
If you want more of the past, you’re going to get left behind.
The scan is to see if your eye movements indicate you are not paying attention or drowsy.
Manufacturers have obviously become oblivious to the wants and needs of their customer base. Consumers aren’t interested in covering the $5 million dollar a day losses at Cruze.
Why not just pay more for Tesla and know that the updates will roll out to me without paying extra for things like heated seats?
Except, to be fair, a lot of Tesla owners paid a lot of up-front/advance money for “Fully Self Drive”, which was promised for later, which has yet to arrive.
GM seems to be trying to move everything they have upmarket. That’s a neat idea, and I’m sure it sounds great when the boardroom is talking about it.
The reality though, is that GM is not a premium car manufacturer in anyone’s mind, and a brand like Chevrolet is decided low end.
Good luck.
As the article stated at the end, the shift from ICE to EVs will raise the overall average production cost of GM vehicles. If GM is able to meet their own volume objectives for EVs by 2030 they are probably projecting that they will be operating at a loss in 2030 (if not before) due to higher material costs for EVs and lower profit contributions from ICE vehicle due to lower ICE volumes. The subscription $ for options is a way of generating significant additional revenue for content that is already in the vehicles (almost all profit) which can offset the higher production cost of EVs. This is a good plan if the rest of the industry also adopts it. I personally would not be interested and would not buy a vehicle where a subscription like this was added to the vehicle purchase price.
Well said Oscada Bill. I have worked in the software industry for the bulk of my career and to me, this seems like a very ham handed and clumsy way for GM to monetize features that typically were provided “intact” when you purchased a car. Are they going to charge me a monthly fee for the privilege of being able to accept a mobile call via Bluetooth when I’m driving? It reeks of nickeling and diming the consumer to death and I for one would vote with my feet pretty quickly and say no thanks. BMW is attempting to do the same thing with heated seats and that just strikes me as wrong. We’ll see how this plays out.
If they charge for use of any basic features we are already accustomed to they can keep the car. DO NOT disappoint GM. Pay attention to the backlash of BMW!
This is going to be key! Features that buyers are used to shouldn’t be taken away. So far I’ve read nothing that would suggest that would be the case.
Absolutely the f-not.
ONSTAR WAS A GM PIPE DREAM WHO NEEDS IT WHEN YOUR PHONE GIVES BETTER DATA ETC
ALSO THERE WILL BE SOME MFGS THAT WILL GIVE YOU HEATED SEATS ETC….AND NO MO. CHARGE
CUSTOMERS WILL GO TO THOSE MFG GM LOSES
U BUY A CADILLAC AND HAVE TO PAY FOR EXTRAS LOL LOL GOOD LUCK GM
Love to know who’s doing their research for them and where they found consumers willing to pay $135 a month for this stuff.
The moment someone says they want me to pay for heated seats etc. is the moment I say cya. I’ll find a manufacturer that’s willing to allow me the “privilege” of paying for the options once and then leave me alone.
I have Super Cruise in my car and it’s subscription based at $30 a month on top of the OnStar subscription and neither of those happen.
Did not pay for Onstar, will not pay for this.
What I expect all car manufacturers to do is offer packages for software. As everyone knows, car makers are very good at offering packages that include one thing you want, but a bunch of things you don’t want, and charging for the larger package. They won’t sell one item for a fair price. Just like cable packages – you want CNBC? You get a package with CNBC and 50 other stations you’ll never watch.
We’ll see what happens. If a company has a monopoly on a feature (Super Cruise), they’ll make you pay. I don’t think they’ll get away for a monthly fee for heated seats.
GM sees an opportunity to make a lot of money. That money comes from their customers. They’ll make money from their customers at the risk of alienating their customers. The car companies will “test” the packages and see consumer reaction.
Myself – I can see paying for “X”, but resenting it, and the company loses goodwill from me, and my next purchase I feel zero brand loyalty to GM. If GM treats me fairly, I’ll be a long-term customer.
GM has a choice – make money now, or build long-term customer loyalty. Here’s a hint regarding how I see this working out- Mary Barra’s paycheck is based on profits this year and next, not the degree of customer loyalty 5-10 years from now.
Have you seen GM’s long term reliability numbers? They don’t seem to be too concerned with loyalty.
I can hardly believe what GM is contemplating. We’re already feeling puckered by the exorbitant prices they’re charging. I’ve been a GM fan most of my life but if this additional gouging happens you can be certain I won’t be purchasing any more. What are they doing? Trying to see just how far they can go…screwing us…before we revolt? It’s a sorry day. Shame on you.
Maybe profits but I won’t contribute!
Sounds like marketing determined that the same individual who happily drops $7 a day on Starbies, won’t mind spending $4 a day to remote-start their car from a 1/4 mile away.
BMW will change a monthly fee to turn on heated and cooled seats. Screw that ! Just another way to fleece the consumer. They are all ready over priced. I paid once for those features that’s enough
There is a new Vietnamese EV car company coming to the U.S. Starts with a V. They have a new “model” where they sell you the car and lease you the batteries. With the new Democrat law just passed that has a tax credit of $7500. with an eligibility cap of $55,000, for cars and $80,000 for trucks and SUV’s this could be the wave of the future. I’ve been a GM buyer all my life, but this would be a deal breaker .There are lots of choices out there, although as a Marine vet a Viet Nam car isn’t one of them.
Vinfast has been in the news for a couple of years now. It’s interesting, but it’s kind of too early to really say much about them one way or another.
It certainly looks kind of scammy, but who knows?
What’s next subscription to be able to start your car?
RELAX WE WERE NOT DUMB ENOUGH TO PAY FOR ONSTAR WE WONT PAY FOR THEIR MO CHARGES WE WILL JUST BUY KOREAN AS THEY GIVE U EVERYTHING FOR A DECENT PRICE
WHEN GM FIGURES IT OUT AND DROPS THE BS WE MIGHT SWITCH BACK
>> RELAX
How can we relax with you screaming?
GM Marketing continues to come up with ideas that make customers NOT buy a GM product.
talk about delusional ! Do these wankers ever walk the streets with the unwashed masses who are POOR?
The Japs and Koreans (and Indians if they ever get their stuff together) are gonna LOVE cleaning up the 80% of entire car market for non-Wall St tycoons and grossly overpaid Silly-Con Tech nerds.
Wow! The automakers are learning from the lodging business. You check into a hotel, pay the room rate charge, room tax, sales tax, amenities fee, garage parking fee, room food service delivery fee, valet fee … where’s it going to end?