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.