Life in the FaaS lane

BMW has begun charging customers roughly $18/month for heated seats in several countries, including the UK, Germany, New Zealand, and South Korea. It’s not clear when this started, but news outlets began publishing reports this week after it was spotted in South Korea.

🤑 A deeper dive… Carmakers have always charged more for high-end features… that part is nothing new. But in recent years, some companies have focused on delivering those products via software, rather than hardware. (Think of it like in-app purchases for your car.)

• Take BMW for instance. Since 2020, the German automaker has placed many of its features behind subscriptions for international drivers, including automatic high beams, adaptive cruise control, heated steering wheels – and now, heated seats.
• For the heated seats, customers can subscribe for a year ($180), three years ($300), or pay for “unlimited” access for $415.

🤔 One interesting thing: A heated seat subscription isn’t currently an option in the US… which makes a lot of sense, when you consider only 25% of car buyers would actually think about purchasing one. BMW actually tried charging its American buyers $80/year for Apple CarPlay in 2018 before walking it back a year later due to consumer backlash.

🚘 Zoom out: Other automakers currently experimenting with a FaaS (features as a subscription) business model include Toyota, Porsche, Cadillac, Volkswagen, Audi, and Tesla.