General Motors said it expects its in-car subscription services to generate nearly $ 2 billion in revenue this year and will reach up to $ 25 billion by the end of the decade, an amount that the company said on Wednesday will put it in the same league as Netflix. , Peloton and Spotify.
The automaker has 16 million vehicles on the road in the United States and Canada. About a quarter of those vehicles – 4.2 million – have owners who now pay for subscription services, Alan Wexler, senior vice president of innovation and growth at GM, said during a presentation at the company’s investor event on Wednesday.
GM expects that number to grow, especially as it prepares to launch its end-to-end Ultifi software platform in 2023, which will allow for an improved subscription platform and updates. live software.
GM’s current subscription platform supports services like OnStar, a subsidiary of the company that provides in-vehicle safety, emergency services and navigation.
The company said that the average willingness of its customers to select multiple services is high. GM conducted a survey of several thousand customers, offering them 45 different feature and service options. On average, customers chose a set of 25 different products and services.
“Our research indicated this with the law to mix together of irresistible offerings, customers are willing To spend $ 135 through month to mean for some products and services, âWexler said.
By 2030, GM predicts that 30 million of its vehicles in the United States will have connected car technology, leaving it with an addressable market of $ 80 billion. Wexler said GM aims to generate an additional $ 20 billion to $ 25 billion in revenue, of which $ 6 billion will come from insurance and the rest from one-time purchases and subscriptions.
In addition to OnStar, GM intends to target customers interested in Maps +, an app-based in-car navigation solution that rolled out in April and can be activated with Alexa voice control. GM also sees a great opportunity to generate revenue through its commercial customers, particularly with its existing service, OnStar Vehicle Information which can assist mixed GM and non-GM fleets in fleet management.
“Only this service alone meets the Needs of a massive market, âWexler said. “Hunderwear of thousands of connected fleet Vehicles with The data of millions of travel, and hundreds of millions of miles, all of this The data provides huge monetization Opportunities. We support a part for the climb of The data this we have To job with, asd we plan To leverage this.”
Wexler unveiled more details and the first KPIs on GM’s subscription services, which he said would be “the foundation of a growth and recurring revenue opportunity” for the company, with more news to come. tomorrow.