Someone over there has fond memories of OnStar, and is desperate to relive their glory days.
Why would anyone buy an expensive car which is designed to last a decade while it has essential pre-installed features locked behind a subscription? If they want recurring revenue that badly, they should just lease it out.
No more $3k package to add heated seats, just upgrade OnStar to OnStarPrime+ for $49.95/mo!
Of course, all American auto makers have wildly unrealistic plans for electric vehicle adoption in the next 5 years, too -- i think one of them is predicting $600B of revenue from EVs before 2030, when they currently only make a few million a year. Their finance departments must have some good drugs in the water coolers.
Correct on "wild profit margin", but your numbers are wrong according to FY22 10-K filing[1]:
Services Revenue = $78.129B
Services Cost of Sales = $22.075B
Services Gross Margin = 71.7% ($56.054B)
Every feature on the car will be a subscription... Heated Seats, Fast Charging, Nav, everything
Of course they will be "free" for the first 3-5 years of ownership, the free is non-transferable to a new owner... and you will be able to get the GM+ All Access Plan to "unlock your car's full potential for only $500 a year".....
This is not a GM thing, this is the dream of all Auto Makers..
You may "buy" the car, but you are not "buying" the software that runs the car...
This is why I'm really skeptical of mandating EVs without consumer protection because this seems to be the point where automakers are seeing dollar signs and can force buyers into higher price brackets.
There should be no EV mandate, then there would not need to be consumer protections as the market would do what is does best and allow manufacturers to compete on the merits of the vehicles not by the government choosing what we should be allowed to drive.
I think there are already too many regulations on the manufacture of cars.
At the state level I think the only regulations should be those around direct safety concerns (like air bags, lights, etc). Efficiency or other non-safety related regulations should be disallowed. Further safety regulations should be limited safe operations for other drivers sharing the road, not passenger protection (outside of regulations on truth in advertising, product defect)... passenger protection should be a market dynamic, coupled with greater tort reform to be able to hold liable manufacturers for their marketing claims.
We'll see how that pans out.
GM previously attempted to force an additional upfront 3 year OnStar purchase on top of the vehicle purchase on some Buick/GMC/Cadillacs. They walked it mostly back, but they still rolled that stupid-ass idea out.
https://www.thedrive.com/news/gm-makes-1500-onstar-subscript...
Consumers aren’t stupid enough to think they should be paying subscription fees to GM for infotainment features when they have other, often free, options.
Their spokesperson says all their cars come with 8 years of free service!
Unless they’re lying to their customers revenue won’t stop ramping until 2032 or so.
Presumably the SEC filings and investor facing statements they are making are in error instead.
/s