Mazda has started charging a monthly subscription fee of $10 for some connected services in its vehicles like remote unlocking. The company also irked buyers by removing an open-source workaround that some owners were using to get around the fee.

While Mazda was always clear that the service, which was free to begin with, would become a paid subscription eventually, right-to-repair advocates are up in arms against the fee. Here’s everything we know about Mazda’s move and whether subscription-based services are the way forward for the automotive industry.

Mazda launched its Connected Services in 2019, offering services like remote unlocking, checking vehicle status including fuel levels, and locating the parked vehicle through the app.

Mazda Started Charging for Connected Features

The company informed buyers that it was a complimentary service for three years, after which they would need to pay to keep the subscription active. Mazda did extend the free period but eventually decided to lock the features behind a paywall. The Japanese automaker informed buyers through a personal message informing them about the change.

“As a valued member of the Mazda family, we want to inform you that your complimentary 3-year trial of Mazda Connected Services will expire in 60 days,” says the message received by Mazda car buyers.

A proactive tinkerer quickly developed a workaround but Mazda filed a takedown notice with the DMCA saying the code violated its “copyright ownership.” Meanwhile, along with buyers who are irked at being asked to pay for the connected services, right-to-repair advocates like YouTuber Louis Rossmann have also criticized the move. You can hear what Rossmann has to say about the frustrating fees in the video below.

Some US states have already passed right-to-repair acts that enhance the ability of consumers to repair their products instead of getting them serviced by the original manufacturer for service.

Massachusetts went a step further and enacted the Right to Equitable and Professional Auto Industry Repair Act in 2020 which mandates that automakers must equip vehicles with a standardized open data platform beginning model year 2022.

BMW Unsuccessfully Tried Selling Subscriptions

Mazda is not the first automaker to experiment with charging customers a subscription fee for value-add services and other automakers have also tried such measures.

For instance, BMW offered a subscription for its seat warmers. It offered a monthly subscription for around $18 while one-year and three-year subscriptions were for $180 and $300 respectively. The company also offered an “unlimited” access for $415. However, last year, the German automaker quietly dumped the plan that it was offering in several countries outside the US after the announcement caused widespread outrage in the car community.

Pieter Nota, BMW board member for sales and marketing told Autocar in an interview “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.”

Nota added, “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.”

This wasn’t the first time BMW failed to sell a subscription to car owners either. It also tried charging an annual fee for using Apple’s CarPlay, but that was even more outrageous, so it eventually made it a free standard add-on in 2019.

Separately, Mercedes also introduced an annual subscription of $1,200 to unlock the full potential of their Mercedes EQ electric-powered vehicles in terms of performance.

Car Buyers Are Skeptical About Subscriptions

A survey by Cox Automotive found that automakers would find it challenging to generate significant revenue from subscription features, also known as Features on Demand (FoD) as only a fraction of buyers were interested in paying for them.

Three out of four respondents in the survey believed that these FoD features would only allow automakers to make money. Also, 69% of respondents were amenable to choosing a different automaker as some features were available only through a paid subscription.

“In the market right now, there is low consumer awareness and some skepticism on the part of shoppers. To gain consumer acceptance, automakers must ensure consumers perceive subscription-based features as a good value and not just a money-grab,” said Cox in its report.

Self-Driving Could Be a Key Revenue Driver for Auto Companies

Self-driving could be an anomaly here as automakers are looking to offer the service on a subscription. While BMW dropped plans to charge a subscription for seat warmers, Nota said, “We actually are now focusing with those ‘functions on demand’ on software and service-related products, like driving assistance and parking assistance, which you can add later after purchasing the car, or for certain functions that require data transmission that customers are used to paying for in other areas.”

Tesla’s CEO Elon Musk argues that autonomous driving accounts for the bulk of its valuation and said that the company would eventually charge $100,000 for its full self-driving (FSD). That looks like a tall ask as the company had to cut the price twice after having previously raised it to $15,000 as it apparently did not find many takers at that price point.

Tesla is facing lawsuits under the Right to Repair Act as well with a judge ruling that the automaker must face a lawsuit alleging it denies customers the right to repair its vehicles.

Auto Industry Might See More Subscription-Based Offerings

All said, since cars increasingly become a mix of hardware and software, vehicle owners can expect more subscriptions going forward as automakers try to monetize the massive investments that they are making in technology.

While arguably automakers should cover these costs upfront while selling the vehicle, such unbundling is not uncommon where companies sell the product at a lower price while selling related subscriptions later.

Incidentally, the Chinese electric vehicle company NIO even offers car batteries on a subscription. While the battery is perhaps the most important hardware component of an electric car, by selling the car without the battery NIO can lower the initial buying price for the buyer who can then buy the battery on subscription.

While having to pay a fee for features that look like core functions of a car can be extremely frustrating for many, the trend will likely only get worse.