General Motors stated that it expects its subscription services in cars to generate close to $2 billion this year, and as high as $25 Billion by the end the decade. This amount, the company claimed Wednesday, will place it in the same league with Netflix, Peloton, and Spotify.
16 million cars are currently on the roads in America and Canada. Approximately 25% of the 4.2 million vehicles have owners who pay subscriptions today, Alan Wexler (SVP of innovation & growth at GM), said Wednesday during a presentation to investors.
GM anticipates this number to rise as it prepares to launch Ultifi's end-to-end platform for software in 2023. This platform will allow for enhanced subscriptions and over-the air software updates.
GM's subscription platform currently supports services such as OnStar, a subsidiary that provides in-vehicle safety, emergency services, and navigation.
According to GM, customers are more likely to choose multiple services than they think. GM conducted a survey with over 2,000 customers and offered them 45 different service and feature options. Customers chose 25 different services and products in an average bundle.
According to Wexler, our research shows that customers will spend an average of $135 per month for services and products if they have the right combination of compelling offers.
GM expects that 30 million of its U.S. vehicles will be equipped with connected car technology by 2030. This leaves it with a market worth $80 billion. Wexler stated that GM aims for additional revenue of $20 billion to $22.5 billion. $6 billion will come from insurance, and the rest will come from subscriptions and one-time purchases.
GM plans to target customers who are interested in Maps+. This in-vehicle app-based navigation system can be activated using Alexa voice control and was launched in April. GM sees a huge opportunity to make revenue from its commercial customers, particularly with OnStar Vehicle Insights which can assist both GM and non GM fleets with fleet management.
Wexler stated that this service is enough to meet the needs of a large market. There are hundreds of thousands of connected fleet vehicles, with data from millions and millions of miles. All of this data offers huge monetization possibilities. We are unique in the amount of data we have and how we intend to use it.
Wexler provided more details and preliminary KPIs about GMs subscriptions services. He said that this would be the foundation for growth and recurring revenues for the company. More news will follow tomorrow.
