Will drivers pay extra for software upgrades, new features? Of course, if automakers choose wisely

Automakers have high hopes of turning what some auto industry experts call the “smartphonization” of automobiles into a major profit center, that is, profiting from the sale of new features and upgrades. upgraded via over-the-air software updates.

This business model comes with some risk, but it’s an unavoidable concept, says Moshe Shlisel, CEO of Israeli automotive technology company GuardKnox, a cybersecurity specialist.

Automobiles follow the same evolution as personal computers, laptops and smartphones, he said in a recent phone interview. People expect all of their electronics to be quick and easy to update and upgrade, and that includes their cars and trucks.

“The new zero-time generation doesn’t have time to wait or read. They need everything in place now, and it changes the way customers see their vehicles,” says Shlisel. “The reason is that we have stopped moving at Model T speed. Everything is broadband.”

That said, “smartphonization” also carries execution risks for automakers and suppliers, depending on how they apply the concept.

It can be difficult to charge for upgrades, or apply a subscription-based business model, to features customers are already familiar with, like heated seats, Shlisel says.

Some automakers have talked about wiring all cars for heated seats, for example, but only turning them on when customers pay for them. The appeal is supposed to be that you only pay for the heated seats when you’re likely to use them, for a few winter months each year, instead of paying for them when you buy the car and only using them on time partiel.

“Some features we’ve grown accustomed to having in vehicles,” says Shlisel. “Heated seats, we have always had them. Why take something from me and ask me to pay for it? I don’t think that will work. But the ability to update, to customize,” that’s another story, he says.

People would be more willing to pay for software updates that provide “breakthrough” features as they become available, such as better performance or longer range for electric vehicles, or for greater customization, says Shlisel.

“Let’s say I decide I want magenta interior lights inside my car now. I don’t want to go to a store, I don’t want to wait. Why? Because I do,” he says. And tomorrow I’m going to use a different color.”

Margie D. Carlisle