Ford’s Subscription Approach In The Automotive World

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Ford is adopting a subscription-based model, taking cues from Tesla’s innovative approach.

Ford consistently showcases its grasp on the evolving market needs as it shifts its business model towards subscriptions. Drawing inspiration from Tesla, the company plans to offer its BlueCruise advanced driver assistance systems through a subscription model. This strategy might seem unconventional initially, but new car purchasers can avail of this service for three years by making a one-time payment of $2,100.

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The company aims to familiarize users with a subscription-based approach through advanced driver assistance. This feature uniquely straddles the line between requiring physical hardware and being predominantly software-driven, necessitating regular updates. The company’s recruitment of Peter Stern, who has an impressive tenure at Apple (and previously at Time Warner) overseeing subscription services, further bolsters its strategy.

Certain features may not be feasible for a subscription model. For instance, Mercedes proposes a $1,200 yearly fee to enhance the driving performance of their EVs, and BMW suggests an annual $180 charge for heated seats. While this tactic is frequently seen in consumer electronics industries and has been effectively implemented by Tesla, its success in these contexts remains to be seen.

The company’s objective is to ensure that for every aspect of the vehicle’s digital life, they provide an enticing choice for users. This spans from offerings related to media consumption to transportation-specific services like smart parking, eliminating the hassle of endlessly searching for a spot. Over the next two decades, this represents a critical hurdle for all Original Equipment Manufacturers (OEMs).

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