GM: No monthly fee for heated seats, but look for more subscription offerings

In July, luxury automaker BMW started selling some new eye-popping subscription-based services in various countries, included charging drivers $18 a month for heated seats and $10 per month for a heated steering wheel, features that critics argued should be standard.

General Motors assured investors Thursday it has no intention of charging its customers for those features, but it is certain that vehicle software, and the microtransactions it will allow, such as paying for cloud-based services, will be the bigger business for GM in the future compared with the sale of the hardware − the car − now.

Earlier this year, GM said software-as-a-service will generate $20 billion to $25 billion annually in revenue by 2030. To get there, GM has hundreds of data scientists already studying consumer behavior, promising there will be more subscription services on GM vehicles and looking at ways to tie the sale of a car to software services or to other new GM businesses, such as GM’s auto insurance through OnStar.

“I wouldn’t expect us to charge someone $18 for heated seats. We’re very in touch with our customers and where they find value. We know when it comes to features like safety or standard features, our customers expect it has to be included in the vehicle,” said Alan Wexler, GM’s senior vice president of strategy and innovation. “As much as we can standardize hardware in the vehicle and then unlock features with software, we will.”

But, he said, electric vehicles are comprised of about 25% fewer parts than gasoline-powered cars, “So we’re moving into a world of simplification in terms of hardware and we’ll capitalize on it in different segments based on what people’s desires are and what they want to buy.”

GM is studying you

Wexler spoke with Barclays auto analyst Dan Levy as part of a webcast for the Barclays Global Automotive and Mobility Tech Conference Thursday.

“Software is a business for us,” Wexler said, noting that 70% of GM’s new hires over the past two years have come from technology companies to work on GM’s vehicle software.

Wexler said GM has 300 scientists on its data insights team analyzing and forming insights into “what customers are interested in buying, when they’re interested in buying it and how they’re interested in buying it.”

As GM develops new technology, it can garner insight from customers’ vehicle data and interact with the car buyers to sell them more services beyond the initial car purchase, he said. For example, if GM notices a pattern of a certain highway you drive or a certain time or traffic pattern routinely taken, it can send an offer to the driver saying, “Would you like to try Super Cruise on your way home tonight?” Wexler said. “We can offer it to you as a try and buy.”