- Consumers are worried about even more automobile features becoming subscription-based. Volkswagen has a new feature giving consumers the option to pay £16.50, or $22.50, per month to unlock 20 horsepower on its ID.3 vehicles. Despite pushback, subscription features on cars will only become more popular as automobiles increasingly shift toward using more software, according to one Edmunds analyst.
Guacamole costs extra at Chipotle, and so does an extra shot at Starbucks. So, too, will be the case if you want to unlock the full horsepower on some Volkswagen vehicles.
Volkswagen is offering customers an “optional power upgrade” to increase the horsepower of its ID.3 range from about 148 horsepower to 168 horsepower. The 20-horsepower upgrade costs £16.50 ($22.50) per month, or £165 ($225) annually. Alternatively, customers can pay £649 ($878) for a lifetime subscription.
Horsepower, for the uninitiated, is a unit of measurement that describes how much power an engine can produce and how quickly it can do so. Specifically, one horsepower is defined as the power needed to move 550 pounds one foot in one second. Volkswagen, in this case, is able to essentially flip a switch in these EV models to give its engines an extra boost. This upgrade is attached to the car, not the individual, so the feature would remain on the car, particularly if you buy a lifetime subscription for the upgrade, should it change ownership.
Auto Express first reported the change, which has stoked concerns among social-media users about the pervasiveness of the subscription economy.
A Volkswagen spokesperson told Fortune the “power-on-demand function” for its ID.3 range has been available since May 2024 and part of the company’s development of its digital business models. The carmaker also offers subscription services for Adaptive Cruise Control, Navigation, Voice Assistant, and seat heating.
Despite online backlash, the spokesperson said, “So far the customer feedback has been positive. They have the opportunity to still enable additional functions that they may not have considered or needed when they first ordered their car.”
The Wolfsburg, Germany-based automaker has struggled navigating President Donald Trump’s trade policy. Last quarter, Volkswagen reported a $1.5 billion hit from tariffs so far this year, slashing its full-year guidance. The company’s hard pivot into EV production—it surpassed Tesla as Europe’s top EV seller in April—has come with its own set of challenges: The profit margins for EVs are smaller than models with the traditional internal-combustion engine, Volkswagen chief financial officer Arno Antlitz told CNBC’s “Squawk Box Europe” last month.
Consumers’ ire toward subscription features
Despite the growth of the subscription economy, monthly fees for car-connected services have become less appealing to consumers, according to a July S&P Global report. Compared to 2024, when 86% of respondents said they would pay for car-connected services, only 68% of respondents this year said the same.
Volkswagen’s power-on-demand philosophy invokes memories of BMW’s monthly subscription fee for heated seats, which the automaker discontinued due to consumer backlash.
“We thought that we would provide an extra service to the customer by offering the chance to activate that later, but the user acceptance isn’t that high,” Pieter Nota, a former BMW board member for sales and marketing, told Autocar in 2023. “People feel that they paid double—which was actually not true, but perception is reality, I always say. So that was the reason we stopped that.”
But as cars become increasingly reliant on software, consumers should expect to see more of these subscription features in future models, according to Joseph Yoon, Edmunds’ consumer insights analyst.
“As cars become more and more software driven—especially EVs—it makes sense that Volkswagen would build just one car, and let software determine its features and options,” Yoon told Fortune.
While these subscription features are an intuitive next step for automakers, the benefit is less clear to skeptical consumers, who see themselves as having to pay extra for a feature that is already embedded into the vehicle they just bought.
“The uphill battle for automakers is convincing customers that they aren’t ‘double paying’ for a feature set,” Yoon said. “That perception will likely linger as many customers still associate features and options with hardware rather than software, so shifting that mindset will be the most difficult task.”
“As long as automakers can adequately prove the value of feature subscriptions, they are likely to garner customers willing to sign up,” he added.
