Recent Jersey lawmakers need to ban automakers from charging subscription fees for built-in automobile features — just months after BMW’s move to charge a monthly fee for heated seats sparked outrage, in line with a draft of a proposed bill.
The potential crackdown comes as automobile manufacturers increasingly look to construct recurring revenue by nickel-and-diming customers for features that previously were previously included in cars, industry analysts say.
In one of the crucial most egregious examples, BMW recently began charging automobile owners within the UK, Germany and several other other countries $18 per 30 days to activate their heated seats — a move that was pilloried online.
Toyota and General Motors are also making similar moves, with GM telling investors it goals to generate greater than ten times as much subscription revenue in 2030 because it did in 2021.
Now, Recent Jersey Democratic assemblymen Paul Moriatry and Joe Danielsen have proposed banning the practice through a draft bill that may bar vehicle manufacturers and dealers from charging subscription fees for features which have already been installed in cars.
Democratic Recent Jersey assembly member Joe Danielsen is a co-sponsor of the bill. Facebook/Assemblyman Joe Daniels
“Automotive firms are increasingly in search of to charge consumers a subscription fee to access certain features on their vehicles, corresponding to heated seats, despite the fact that the components obligatory for the feature to operate are already installed on the vehicle on the time of sale,” the Garden State politicians wrote. “During this time of rising consumer prices, it’s important to protect against business practices that primarily serve to extend corporate profits.”
If the bill were enacted, firms’ first violation can be slapped with a nice of as much as $10,000 for his or her first violation, followed by fines of as much as $20,000 for subsequent offenses.
Notably, the bill would only bar automakers from charging for features that “would function after activation without ongoing expense to the dealer, manufacturer, or any third-party service provider.” That appears to mean automakers could still charge for features like satellite radio, in-car wifi and maps with updated traffic data.
The bill would also likely exempt many subscriptions sold by Tesla, which charges hundreds for its “Full Self-Driving” feature that receives regular updates and support from the automaker.
Assembly member Paul Moriatry can be a co-sponsor of the bill. Facebook/Paul Moriarty for Assem
Still, the bill would represent a blow to an industry that analysts say is increasingly attempting to mimic the subscription-driven business models of firms like Netflix.
“Most automakers within the last couple of years have began talking about generating huge increases in revenue over the following decade, primarily off the backs of software and other subscription services,” Guidehouse Insights e-mobility analyst Sam Abuelsamid told The Post in August.
“It will be important to protect against business practices that primarily serve to extend corporate profits,” the politicians wrote. AFP via Getty Images
Even before Recent Jersey lawmakers floated a possible subscription ban, Abuelsamid predicted that automakers will inevitably run into customers’ “subscription fatigue” — and said automobile firms are “fooling themselves” with plans for enormous subscription businesses.
Only 25% of US automobile buyers can be willing to pay extra for subscription automobile features, in line with a Cox Automotive survey from April.
