One of the most egregious moneymaking trends in the auto industry today is the rise of the subscription feature. Sometimes, it’s for software functions like navigation—Tesla recently announced that owners of cars will have to pay $99 per year or $9.99 per month to access navigation, maps, and voice commands once their cars reach a certain age, for example. And previously, BMW made headlines by making Apple CarPlay a subscription feature before backtracking in 2019.
But we’re also starting to see automakers sell cars with built-in hardware features that must be activated through a subscription. Again, BMW is a notable example here; in markets like Korea and the United Kingdom, the company offers a subscription for features like heated seats. Tesla provides another example. It ships every car with the hardware required for its “Full Self Driving” feature but charges a fee—just increased from $12,000 to $15,000 in September—to activate it.
Some legislators in New Jersey are unhappy about that business model. In late September, Assemblymen Paul Moriarty and Joe Danielsen introduced a bill that would prohibit car makers or dealers from offering subscriptions in New Jersey for any feature that uses hardware already installed on the vehicle at the time of purchase unless that feature would represent an ongoing expense to the dealer, manufacturer, or a third party.
The bill exempts third-party services like satellite radio or Wi-Fi and establishes penalties of up to $10,000 for a first offense and up to $20,000 for subsequent violations.
However, it’s still just a bill, and there’s no guarantee it will be passed into New Jersey law. Additionally, the “ongoing expense” requirement may be easily satisfied if an OEM has to pay to maintain a server or connectivity, as would be the case with a navigation system or partially automated driving feature that pulls in data from the cloud.
This legislation is somewhat surprising given the state in which it was introduced—BMW is headquartered in New Jersey, along with several other automakers. We’ve asked BMW for comment and will update this article if we hear back.
