Unlocking the Ka-ching

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How’d you like to pay extra to go farther? 

Electric car owners may soon have that “opportunity,” as paying extra for something that used to be given is often styled.

Like a car’s gas tank, for example. It comes standard. If it holds 15 gallons of gas, you don’t have to pay extra to be able to pump 15 gallons of gas into the tank – as opposed to just ten. But it’s different with electric car “tanks.” The capacity of their battery packs can be increased – or decreased – to hold more (or less) charge, almost literally by flicking a switch. Or rather, via the sending over-the-air of an “update” – as these random changes to the way your device works – are styled

There is an opportunity for Ka-ching here.

VW is just one of several companies eyeing the monetizing of what Tesla demonstrated is easily feasible with electric cars, the connected cars of a tomorrow that are already here. When owners of Teslas were faced with not being able to drive far enough away from a hurricane that was bearing down on Florida, Tesla generously “unlocked” additional battery capacity, so that the cars could go farther before running out of charge.

There was no additional charge for that – this time. But the prospect of being able to charge people, next time, has car companies faced with trying to find a way to make money selling electric cars smacking their lips.

Or at least, maybe balancing their books.

Everyone within the industry knows that electric cars lose money. Tesla – the dominant player – makes money selling stock (and carbon credits), not cars. The cars are what used to be called loss leaders by people inside the business. These were “write-off” cars made chiefly to satisfy some regulatory requirement; there wasn’t any money in them, per se.

They were made to offset potentially greater losses for not making them at all.

The electric cars being made by companies other than Tesla fall into this category. The chief reason they make them is to “offset” the cost imposed by the government on the rest of the cars they make for not meeting the minimum miles-per-gallon numbers stipulated by CAFE regulations.

One electric car model that is credited with  averaging 111 “MPGe” – like the Nissan Leaf – mixed in with that car company’s other (non-electric) models that only average say 30 MPG helps up the overall “fleet average” MPG. This latter being the basis for  determining how much money the car company ends up having to pay the federal government in “gas guzzler” fines. The car buyer ends up paying for that when he buys the car, which has its sticker price adjusted accordingly.

But electric cars still cost money to make that is not recovered at time of sale.

The losses are especially acute for non-Tesla car companies that haven’t be able to rent-seek the way Tesla has been able to. It was at one time the only company making electric cars – and the other car companies, faced with regulations mandating they manufacture “zero emissions” electric cars or buy carbon credits instead, to “offset” their “emissions” of carbon dioxide, were obliged to buy them from Tesla – and that plus stock-buying frenzy predicated on regulations mandating mass-selling of EVs – is how Tesla finances the sale of its electric cars.

When everyone else sells them, too, a way will have to be found to make money selling them, rather than buying credit for not making them.

There’s an app for that.

The one you buy – after you buy the car – in order to get the range that didn’t come standard. Maybe it’s a one-time charge to “unlock” the additional potential. Ideally – from the standpoint of the companies developing this new revenue stream – you’ll pay for a subscription, ongoing, that “unlocks” the extra range, so long as you continue paying extra, ad infinitum.

It’s a beautiful thing. Or rather, a profitable one.

One that has many opportunities for the monthly Ka-ching, ad infinitum.

There were stories circulating online about BMW offering an app that would “unlock” the seat heaters in its cars for only $18 per month or just $180 per year. That’s a not-bad Ka-ching over several years. Especially if added to other Ka-chings, something technically – electronically- feasible since all new cars are connected cars, just like electric cars. What that means – one of the things it means – is that the car’s functions and features, such as the seat heaters functioning or the stereo playing, can be “updated” over-the-wire, just as Tesla sent “updates” over-the-wire to increase the range that didn’t come standard with its cars.

Each feature presenting the possibility for Ka-chings, ongoing. Because as long as you own a connected car, you do not fully own its functions and features, which may or may not work, according to the “updates” sent over-the-wire and whether your subscription is fully paid up.

So as to assure you never stop paying. Just as you do for Hulu and other “streaming” services, which aren’t called that just because they come over the ether. The revenue stream is what it’s all about, baby.

Welcome to the Ka-ching, ongoing.

. . .

Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in! Or email me at [email protected] if the @!** “ask Eric” button doesn’t work!

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27 COMMENTS

  1. The Ka-ching doesn’t end there. Think about how easy the mileage tax will be to administer wit EV’s.
    Purchase your miles like a ore-paid cell phone. Enter your code to unlock 100 miles. After which your car fails to move until you buy more miles, assuming of course you have enough social credits to buy the miles.
    I’ll bet the software modules are already written and installed just waiting to be activated.

  2. John Deere, the agriculture equipment manufacturer has been disallowing third-party repairs of its equipment, insisting that the “software” and “firmware” needed for the equipment to operate belongs to John Deere and NOT the purchaser of the equipment.
    Thankfully, some Eastern European “hackers” have been able to “unlock” this “software” and “firmware” making it possible for third-parties to effect repairs. These “hackers” have been able to unlock features purposely “locked out” by the manufacturer unless a “fee” to pay for the feature is paid.
    I did the same thing in the 1990s, reverse engineering an EPROM to add features to a proprietary system that were purposely locked out by the manufacturer unless an additional fee was paid.
    I’ll bet that hackers are already working on the BMW and other vehicle systems that are purposely disabled unless fees are paid…

    • Anarchyst,
      Pirated software and games have long been superior to their DRM gimped versions. Now that software has turned into a service you pay for on a money grubbing schedule the availability of up to date cracked clean versions has never been better. I’m truly surprised more reverse engineering hasn’t taken place with car electronics but surely mass adoption of software lockouts will be a challenge hackers can’t refuse.

  3. That’s a spectacular idea. Lets pay more for extended range and likely push the battery pack further into a damaging deep cycle, reducing its life. If electric cars are forced on the masses you better check out what options the previous owner of a used car bought from the GM app store. Extended range, enhanced acceleration or even heated seats will likely mean the cars more spent than the mileage might suggest.
    Another issue with this app store model is the fact you’ll be lugging around weight and complexity your base model doesn’t even need. Furthermore this opens cars up to on-demand obsolescence similar to the iphone scandal where apple was found to be slowing down older devices supposedly to save the ageing batteries… Because a company faced with low quarterly profits wouldn’t gimp somebody’s property in order to “nudge” consumers back on the debt hamster wheel.

  4. The thing I am concerned about is a “kill switch” that will supposedly be Fed mandated in all new cars by 2026. If that is accurate I definitely do not want to buy a car with a kill switch. I cant even imagine the anxiety of driving my car knowing it would be possible for some faceless remote party to disable it at any time. Thats just nuts.

    • Really a software compamy since all electrics will be pretty much functionally identical as far as the “hardware” goes

  5. “Front Seat heating gets things nice and cosy in no time,” the BMW ConnectedDrive store reads. “Activation after purchase is quick and easy.”

    “One of the most unusual items found in the BMW ConnectedDrive Store is called IconicSounds Sport. It essentially plays fake engine noises through the car’s speakers should you be willing to pay $138 to have the feature permanently,” automotive website Motor1 pointed out. — ZH

    Vroom, vroom!

    IconicSounds definitely will appeal to the kids who used to attach cardboard squares with clothespins, to rub the spokes of their bike wheel for that authentic (?) motorcycle exhaust sound.

    For bit higher price tag, MistressMousey, in a honeyed voice, will praise you as the hunk and stud you actually are, and describe the naughty things she’s gonna do when you get home.

    • Jim,
      BMW issuing motor sounds through the sound system is not new. I test drove I think an ’05 Z4 that had it. They built the car so quiet you couldn’t hear the engine, so they created engine noise, which of course you could turn off if you prefer.

  6. I read about the BMW seat heaters, sounds like something that could be corrected with a wire cutter and some clip leads; on the other hand, this sounds like a baby step on the way to “you’ll own nothing”. Where are the hackers when we need them? Think I’ll be spending more time under my ‘01 Corolla to keep ahead of the rust because there’s no way in hell I’d put up with being fee’d to death for something I supposedly owned.

  7. I think the ka-ching effect has been going on for a while. Cars are optioned out to the point any basic sedan or truck has features only high end luxury models previously had. Try getting a car with no AC, radio, or cruise control and crank windows. Today’s (Base model) is yesterday’s Cadillac “back when caddys were actually more luxurious than other cars.”
    The subscription based options are just the next logical step to the financialization of everything.

    John Kabel brings up an interesting point about people extending credit just to survive. What better way to enslave your population/customers. Corpsand govsare one in the same in this manner. Make them do it themselves and believe it was their idea all along. “I mean, you DO want the heated seats and the ability to drive 30 extra miles between charges right?” It will most likely work because most people don’t think past quitting time of their job they hate, and can’t math well enough to know the long term consequences of little payments with interest in dribs and drabs.

    Gold is the currency of kings
    Silver is the currency of the people.
    Debt is the currency of the slaves

    • Sicilian,
      It won’t work if folks can’t afford a late model car at all. The WEF wasn’t lying when they said you will own nothing. They WERE lying when they said you will be happy. Unless everyone has a drip feed of the latest narcotic.

      • John Kable: I think most will be field slaves who barely have enough to keep alive and in a medicated or distracted state as to not burn the whole thing down. The (house slaves) will have nicer stuff, but still be slaves nonetheless. The problem for the inbred parasite class (I’ll not call them elites or powers that be) is that their enemies get a vote once people feel they have nothing to lose it can get sideways in a manner they’d never expect.
        The farmers of men will have to keep enough gibs, opiates and tranquilizers flowing or the farm animals punch will through the fence and become uncontrollable.

  8. Eric,
    I don’t think we will have to worry about it for too long, the way the worm is turning in the entirety of Western economies. The plebs using credit cards to pay living expenses is not a good sign. It means that a great many have been living above their means for some time, as the “elites” keep extracting what wealth they have. It’s not that their lifestyle is excessive so much as their ability to pay for is being confiscated by all the usual suspects. Inflation being a key to their assets, among other monstrosities. Like “climate change”, which happens all the time, being treated like a virus. Which has given us EVs, among other things, like not being able to power a grid strong enough to supply air conditioning, much less an EV. And price increases to match.

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