Mercedes has taken the concept of in-car subscription services to a new high, or low depending on your point of view. The German car giant’s US customers are now being asked to pay an annual subscription of $1,200 (€1,155) to extract extra performance and acceleration from their cars.
The subscription service, called Acceleration Increase, applies to Merc’s recently launched new all-electric models, the EQE and EQS saloons and SUVs. If you’re driving an EQE 350+ saloon, the $1,200 a year subscription raises the power of the car’s electric motor from 288hp to 349hp, and cuts 1.1 seconds off the 0-100km/h time.
For an EQS 450 4Matic model, power increases from 355hp to 443hp, and the 0-100km/h time comes down by 0.8 seconds to 4.5 seconds.
Netflix model
It isn’t the first attempt at moving car buying to the Netflix model, but it’s one of the first subscription programmes to offer a definitive performance improvement.
Previous efforts, such as those by BMW which caused an uproar with customers and consumer groups, sought to offer extras such as heated seats and Apple CarPlay on a rolling subscription.
So far, Mercedes has not confirmed offering the pay-for-power option in Europe. A Mercedes spokesperson told Top Gear Netherlands that there were legal difficulties with option where European customers are concerned.
There could yet be legal difficulties across the Atlantic. Lawmakers in the US state of New Jersey have begun a push-back against the rise of in-car subscriptions for functions and services. If passed into law, the bill put forward by New Jersey state legislature members Paul D Moriarty and Joe Danielsen would seek to limit the money that carmakers can charge their customers for ongoing subscriptions.
Value for money
Carmakers say that this is actually a way of offering better value for money — in the case of heated seats, the argument goes that consumers might only want to actually use such a function in winter months, and don’t need them the rest of the year. The increasing number of functions controlled by touchscreens, as opposed to physical buttons, along with over-the-air software updates, makes this process much easier to control.
However, critics of these plans have pointed out that not only are carmakers looking for a new, and extra, stream of revenue they’re also using the idea to lower costs at the manufacturing level. Fitting optional extras to cars on the production line is a time-and-money consuming task, so if every car was being fitted with the same parts — heated seats, active headlights etc… — and only having them turned on after the assembly process has been completed, carmakers could save millions on streamlined production systems.
The New Jersey proposal would: “prohibit a motor vehicle dealer or manufacturer of motor vehicles sold in this State from offering to a consumer a subscription service for any motor vehicle feature that utilises components and hardware already installed on the motor vehicle at the time of the vehicle’s purchase or lease; and would function after activation without ongoing expense to the dealer, manufacturer, or third-party service provider.”
The ‘ongoing expense’ clause could give carmakers something of an out, as there could well be justifiable ongoing expenses in the case of optional services such as concierge-style systems or major software updates. Physical items, such as the heated seats we’ve already mentioned, could be harder to justify although not impossible if a carmaker could show that upgraded software was improving the performance or efficiency of those heated seats.
Consumer concerns
Breakingnews.ie contacted the BEUC, the EU’s consumer protection organisation, which responded by saying: “An automotive world where everything becomes subscription-based could be a very confusing and potentially risky one for consumers. You can draw a parallel with a related discussion: access to car data. We’ve been calling on the EU to regulate this, since we note that more and more data is being generated - with little consumer control over it.”
Indeed, Robin Loos from the BEUC told Breakingnews.ie that the organisation has serious concerns about the sort of connected technology that would enable such subscription services.
“The car definitely knows a lot about me and my habits, and not only the mobility-related ones. And I now feel completely trapped by its initially tempting, but later restrictive, service proposals” said Loos.
The BEUC has serious concerns that in-car subscriptions will lead to a lack of competition when it comes to electric car charging prices, as cars may be designed to automatically guide the driver to a station owned by the company that made the car, as opposed to the one with the best price. Equally, prices for services such as roadside recovery, tyre repair or replacement, or even insurance bought through the touchscreen could be increased without any prior warning — everything will be covered by the ‘terms and conditions’ which, of course, few of us ever actually read.
Speaking about the delays in enacting serious legislation covering car-generated data, the BEUC said: “This delay in proposing a sector-specific regulation is particularly detrimental to consumers: they see their car sharing a growing amount of data without any control over it, and they are being locked in communication systems without any possibility to make alternative, informed choices. Further delay in taking legislative action will only open the door to further abuses by carmakers or tech companies.
“Indeed, carmakers do not simply act as gatekeepers for the access and use of consumers’ data. The emergence of application platforms and the growing involvement of technology giants pose serious concerns to how this data will be used. Recently, Stellantis (Citroën, Opel, Peugeot, Fiat...) concluded an agreement with Amazon to equip its vehicles with software-defined platforms and use Amazon cloud services to store data.
"Everything that will happen inside and outside the car — entertainment, payment services, navigation system, but also connection with the consumer’s smartphone and home connected devices — will be controlled by Amazon, in what looks like a data dystopian scenario. This is bad for consumers’ privacy, this is also bad for the competitive structure of not only in car market, but also other related markets such as transport and logistics, as Amazon could use the data harvested to reinforce its market power across numerous markets it is active on.”
