Volvo To Create Paid Subscription Services For Its Electric Vehicles

Jan. 15, 2023 5:35 PM ET by Ian Wright Electric Vehicles / 6 Comments

It will start with the EX90 SUV.

Volvo plans to use Qualcomm Digital Cockpit hardware and software to improve customer experience and gain additional revenue by selling subscription services. According to Automotive News, this will include audio content, navigation content, and digital services. This new subscription model will start with the Volvo EX90 electric SUV.

"We will see cars that need to last longer, and more of the value is driven by software, so we will need to find new business," said Martin Kristensson, Volvo's head of product definition and partner management at CES.

Volvo is one of many companies looking for new ways to make a profit due to EVs needing less maintenance. BMW has become the face of this new phenomenon as it was the first to introduce this business model, which it says is here to stay.

Volvo now uses Qualcomm's powerful Snapdragon SA8155 chip to power its Android operating system. It's also powerful enough to serve as the central hub of an entire car. If you use an Android phone, you likely use a Qualcomm chip daily.

Our source, Mark Granger, head of Qualcomm's Digital Cockpit automotive product, pointed out that "the automotive industry is reaching the same tipping point as smartphones did when they became updateable with new apps and features."

However, both Android and Apple phones are updated with new features for free, and their manufacturers gave third-party developers the means to create additional software for what has become a computer in your pocket.

Still, you can use that same phone to pay for various apps and to subscribe to streaming services like Netflix, Hulu, Amazon Prime, and Disney Plus.

"What we can monetize are things that go above and beyond; both car-centric functions like automatic parking and also digital services," Granger said.

This brings us back to automakers getting closer to putting features included in the car behind a paywall. If a customer purchased a car capable of automatic parking, they would not want to pay extra to use it. There is an argument for subscriptions services as well, though in our experience, the vast majority of Americans are vehemently opposed to the concept.

Kristensson assured the media that Volvo wouldn't charge extra for safety features. However, Level 3 hands-free autonomy might not be something Volvo will class as a safety feature and will likely be added to the EX90 and all of Volvo's upcoming EVs later.

"Autonomy is time-saving, and time is the most precious resource. If I can save half a day more, that is probably very valuable for you," he said.

Volvo To Create Paid Subscription Services For Its Electric Vehicles

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