Car won't start because you haven't paid your monthly subscription fee? It could happen soon as Tesla, VW and Chinese brands start to bring in subscriptions for features that used to be free | Opinion

The rise of smart electric cars could see us fall into a future where we have to pay for nearly every function – even turning the vehicle on.

Computers have been an integral part of vehicles since the 1980s, when engine management systems and electronics became more sophisticated, but it was always a car first and mainly mechanical with software added. 

In the past 10 years, however, we’ve seen computers become the architecture around which the car is built and aptly referred to as software defined vehicles (SDVs).

Sure, that seems a natural part of the evolution of vehicles which have always been on a path of continual advancement from performance, efficiency and safety to comfort, convenience and entertainment. What could go wrong?

The problem is that with cars essentially becoming just large electronic devices with many functions provided with software that’s updated over the air, the carmakers may choose to charge you for the use of them, or switch those functions off remotely if you don't pay up.

It’s no different from your phone or TV and because you’re fine with paying for your Netflix and Spotify subscription, it stands to reason you’ll be okay with paying a subscription fee for car functions. Things such as heated seats, a head-up display, proximity unlocking, even the amount of power the motor makes. A most extreme scenario is failure to pay a bill resulting in the car itself not being able to be started. The safety implications of this are obvious and concerning at the very least.

That last one seems unlikely but don’t underestimate the potential carmakers see in monetising vehicle functions. Electric vehicles have much fewer moving parts that need replacing, or fixing or maintaining than internal combustion engine (ICE) cars and manufacturers stand to lose billions of dollars they’ve made in the past servicing ICE cars. Subscription fees will be one of the ways they’ll keep that cash flow going.

Some car companies are already charging for features through subscriptions. Tesla currently offers extra features such as live traffic updates, dash cam and music streaming through its subscription model. BMW offers heated seats among other features through subscription, and Toyota has made its remote start function available this way on some models. Mercedes-Benz provides traffic and sat-nav updates using subscription, and Volkswagen will increase the power output of its ID.3 electric hatch from 150kW to 170kW for a monthly or annual fee. 

Chinese carmakers haven’t embraced the subscription model yet in Australia, despite many of the brands such as BYD, Geely and Zeekr having increasingly software-defined these vehicles.

This could be because the competitiveness of the Australian market is forcing the new carmakers into a price war where the value for money of Chinese EVs is all important in attracting buyers to what are still unfamiliar brands. But given enough time the brands will establish themselves locally and be in a position to almost certainly charge subscriptions for what they used to offer for the price of the car.

As vehicles become even more software-orientated, we could see brands compete on the basis of technology in the form of entertainment and comfort features to performance and handling, even the physical features of the car which could change the colour or shades of the car through intelligent body panels, as we’ve seen in concepts such as the BMW iX Flow at motor shows over the past few years.

New Chinese brand Nio has just confirmed its coming to Australia and overseas it offers subscription services to vehicle functions including the EV battery itself. Buyers can purchase the Nio electric vehicle without the battery and then pay a regular fee that allows them to swap to a larger battery for a greater range if they want, but it’ll cost them a bit more.

Nio scored particularly well in a recent report from research company Gartner, which ranked car manufacturers based on the value added to their vehicles through software. Nine categories ranging from electrification, vehicle architecture and autonomy to connectivity, the user experience, and even how tech-savvy the executive team of the company are were rated.

The big winners this year were Tesla, Nio and Xiaomi, with all three being headed by technology leaders who focused on monetising and adding value to their products. 

Mazda, Nissan and Toyota came in at the bottom of the rankings. These three established companies who helped define the modern motoring would be being left behind by carmakers whose software defines their vehicles. 

Will consumers actually pay for features that were once part of the costs of the vehicle? Would you? Well, if you could see the number of silly apps I subscribe to on my phone, the answer is probably yes. 

But maybe subscriptions could lead to cars that are even more affordable - a blank slate that allows a really low entry price with no pressure to add any features unless you wanted to. Oh wait, that’s exactly how the carmakers will sell it to us…