VW now requires a subscription for enhanced electric vehicle performance boost
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There is a growing trend among car manufacturers to offer subscriptions for optional vehicle upgrades, such as temporary power and torque boosts, heated seats, and smarter headlights, especially in the luxury segment. This trend is part of an expanding vehicle subscription and feature-on-demand market driven by a shift towards flexibility, digital convenience, and user-centric ownership models.
Manufacturers like Porsche now provide over-the-air (OTA) subscription upgrades for performance boosts ("Performance Pass"), while Mercedes-Benz offers digital options such as smart headlights through packages available on demand. Volvo’s “Care by Volvo” included AI-powered predictive maintenance within subscription models.
This approach allows drivers to pay for features only when they want or need them rather than upfront, converting car features into a dynamic service rather than a fixed bundle. Consumer reaction is mixed but increasingly accepting among younger demographics who are more familiar with subscription economies.
For instance, Volkswagen offers a monthly subscription for extra power and torque on its ID.3 model, with the power output increasing from 150 kW to 170 kW with the upgrade, and the torque figure improving from 265 Nm to 310 Nm. One driver tried a one-month free trial and expressed liking the extra speed of the car, considering buying a year's subscription. The monthly fee for this power and torque upgrade is £16.50.
However, the practice of charging a subscription for comfort features like heated seats can feel unfair to customers, as the manufacturer has already installed the seats. BMW dropped its plans to charge a subscription for heated seats already fitted to its cars in 2023. In the UK, it's suggested that heated seats are only used for a few months each year, making a case for a rolling subscription.
The optional extra remains profitable as long as enough drivers pay, either upfront or via a subscription. The one-time fee for a lifetime subscription for the heated seats in the VW Golf is £329, while the monthly fee is £8.20, amounting to £81.90 per year.
Upgrades available in the Volkswagen Connect Shop include heated seats, smarter headlights, dynamic interior lighting, AirConsole cloud gaming service, and 'Light Assist'. A Danish owner upgraded their ID.3 through the dashboard display menu system, while the process of subscribing to the heated seats on the VW Golf was demonstrated in a YouTube video by The VW Mechanic in December 2024.
However, some legacy automakers are reconsidering direct involvement in managing subscription services due to operational complexities related to logistics, pricing strategies, and customer service, which are resource-intensive and require startup-like agility. Consumers occasionally express frustration about paying for features traditionally included outright, but the feature-on-demand model is gaining traction through strategic marketing and tailored AI personalization.
This trend reflects broader digitalization and changing attitudes toward vehicle ownership and feature personalization in the automotive industry. The vehicle subscription services market is expected to grow significantly, from approximately $4.8 billion in 2024 to over $22 billion by 2035.
Finance plays a crucial role in the implementation of these vehicle subscription services, as customers opt for flexibility in paying for features on demand rather than upfront purchases. This shift towards user-centric ownership models has brought technology to the forefront, enabling manufacturers like Porsche, Mercedes-Benz, and Volvo to offer over-the-air (OTA) subscriptions for performance boosts, smarter headlights, and AI-powered predictive maintenance.
Aside from cars, the lifestyle sector also experiences digitalization, with platforms like the Volkswagen Connect Shop offering subscriptions for additional features such as heated seats, smarter headlights, AirConsole cloud gaming service, and 'Light Assist'. These subscription economies, aided by technology, are gaining popularity among younger demographics, leading to an expanding market.
