Subscription fatigue: Volvo says customers should only pay for major tech upgrades
Some carmakers are seeking subscription fees for heated seats and faster acceleration. Volvo Car Chief Commercial Officer Björn Annwall thinks that’s a hard sell.
Volvo is making a major push to be a leader in new technologies while committing to selling only electric vehicles, but unlike rival carmakers has no plans to lock customers into subscriptions for minor software upgrades such as heated seats and faster acceleration.
The company officially opened its new technology hub in Stockholm last month, a statement of its intent to make software and tech the defining aspect of all future cars. Volvo is now recruiting hundreds of software engineers and data scientists to enable that ambition – many of whom will be based at the Stockholm tech hub, with others deployed at dedicated tech hubs in Bangalore, India and Sunnyvale US.
The world’s business, tech and motoring press descended on Stockholm to mark the hub’s opening – and Volvo Car Chief Commercial Officer and deputy CEO Björn Annwall’s interview with Bloomberg’s Stefan Nicola and Rafaela Lindeberg suggests that Volvo will steer clear of charging customers for minor upgrades.
You don’t have to hold the steering wheel
Asked whether Volvo had any plans to emulate BMW in charging a subscription fee for heated seats, or Mercedes-Benz, which is charging $1,200 for an update that provides faster acceleration, Annwall said there are no plans to take that approach.
“If you are to charge for software updates, it must be a step change in consumer benefit,” Annwall told Bloomberg. “We will not ask people who have bought a car for 1 million kronor ($96,500) to pay another 10 kronor to get extra heat in the seat.”
But autonomous driving will likely command an upgrade fee, he indicated, with Volvo Cars aiming to bring commercial autonomous products to market mid-decade.
“You don’t have to hold the steering wheel,” said Annwall, “now that’s a step change in user benefit.”
While there is uncertainty around the timings of autonomous driving, both technical and regulatory, Volvo Cars this month deepened its partnership with Google to develop more powerful semi-autonomous driving functionality while also taking full ownership of autonomous driving (AD) software development firm Zenseact.
