Ford is not the only company betting on software and subscription revenue. Tesla Motors offers its “Full Self-Driving” feature as a subscription, and General Motors has said it could generate $25 billion in annual revenue from subscriptions by 2030.
As cars become increasingly software-defined and automakers come under pressure to boost profits despite hefty driver-assist and electric vehicle technology investments, subscriptions seem like a panacea. But automakers must contend with weary consumers shelling out monthly and yearly fees for everything from laundry detergent to Netflix.
On a call with reporters Monday, Peter Stern, Ford’s new president of integrated services, said he was not concerned about consumer backlash to charging for software features.
“I firmly believe that when services deliver value to the customer, it’s appropriate for customers to pay for those services, and that allows us to then take that money and invest in delivering even better services,” he said. “Of course, we’re committed to delivering a great experience for every customer, whether they pay for a subscription and service or not. But we can do better for them when we have a subscription and when we have a service that’s paid for.”
Indeed, features such as BlueCruise are particularly conducive to subscription charges because they are novel, and automakers can continually improve driver-assist technology as more vehicles collect data, said Alex Oyler, director of SBD Automotive, North America. Standardizing the hardware across vehicle lineups is also a cost-reduction measure, he said.
“It is differentiating, and it’s not something that’s necessarily expected as part of the car,” Oyler said. “There are ongoing costs to operate that from an OEM perspective, so there’s a rationale for being charged for that capability.”
Ford has reduced the number of months between releasing new versions of BlueCruise, said Lambrix, with the latest update coming eight months after the previous one.
Already, 225,000 vehicles on the road are equipped with BlueCruise around the world.
“We are increasing the speed at which we are improving the product and plan to continue to invest in bringing the best technology to our customers,” Lambrix said.
BlueCruise hardware will now be standard in the Mustang Mach-E, Lincoln Navigator, Lincoln Nautilus and certain Lincoln Corsairs, F-150 Lightnings, Ford F-150s and Ford Expeditions.
SBD Automotive predicts that more than 50 percent of new-car sales will include BlueCruise-like Level 2 hands-free systems by 2026.
