[benji-york]

This makes sense to me. (Not that I would personally ever buy a car with that mechanism baked in.)

They could either make two models (incurring the costs associated with having two different SKUs) and let people pay more for the one with more power or make one with intrinsically more power and let the people that don't want it pay less with it nerfed.

I would have thought that people (like me) that have spent our lives making a zero marginal cost product would understand the economics at work here.

[jackpeterfletch]

This is quite common already, where they’ll offer a higher performance tier, but that power only comes from the engine control unit, no physical differences.

It makes even more sense in EVs where you don’t have to be concerned with the performance of supporting components to the engine.

The difference here, is that it’s a subscription, not a one time upgrade, and as a result, not an upgrade you can sell on.

[jakub_g]

> The difference here, is that it’s a subscription, not a one time upgrade, and as a result, not an upgrade you can sell on.

From the article, if you buy "lifetime" subscription, it persists.

> Auto Express, who first reported the story, said a lifetime subscription would be for the car rather than the individual - meaning the upgrade would remain on the car if it was sold on.

[JKCalhoun]

I loathe that model. I recognized it decades ago when, each year or so, Sony came out with a new phalanx of new televisions. They would have price points of high-end, less than high-end and moderate. What was frustrating was when the same panel (LCD) was used in a line up and the only features that differentiated the various price tiers were seemingly in the software. High-end might have picture-in-picture for example. Maybe that required a whole additional tuner? Maybe — but other features seemed like they were simply nerfed in the lower priced models.

It's as though, and now I know this sounds crazy, as though some bean-counter with a spreadsheet was actually the one determining price and features and not a team of engineers saying, "Here's what we can deliver competitively."

And while to a younger crowd, that might sound obvious, I would like to suggest that the older U.S. model (and now we're going back to the early days of the wireless, perhaps up to early Hewlett Packard times) was to beat your competition on price and features. You would never nerf a thing in your product line up.

Am I wildly off base here, naive, or have an ignorant reading of the history of U.S. Capitalism? I'm merely a layman so am happy to hear from someone who has studied this stuff.

A bit of a tangent, but I'm also reminded of the era when HeathKit was an option. My dad recalls at least that the HeathKit kits were not always inexpensive — but the completed consumer electronic project would be of very high quality. I know he but some of his early "hi-fi" equipment from HeathKit kits.

A recent headline decelared that China is run by engineers, the U.S. by lawyers. Perhaps it should have said the West is run by marketing.

[anal_reactor]

I remember the exact moment when phone manufacturers removed the SD card slot so that they could sell integrated memory at huge markup while still technically advertising their phones as cheap. The excuse was that integrated memory is faster than SD card, except support of SD cards is on purpose shitty on Android just to enable this whole shitshow.

[simonh]

If you think the US is consumer capitalism in the raw, visit China. It’s a whole other level.

[_aavaa_]

People do understand the economics: tomorrow the subscription costs 3x more, or they chose to stop supporting it when a new model comes out, or etc.

The analogy to software is great though; nobody paying for software owns it, or even has the option to own it. This is not fully the case for physical things, and people are rightly angry about “owning” things without owning them.

[slt2021]

just multiply the monthly payment by 12*6 (avg time to own a car) and imagine giving the full amount upfront to the dealer for the full horsepower.

I dont understand why people balk at car subscription for some feature, but perfectly fine with leasing a car => which is basically a car subscription driven to its logical end?

does it matter if you have to pay $700 to your bank for lease and separately $20 to VW for some feature?

would it matter if you had to pay $720 to your bank instead for full features???

[_aavaa_]

> I dont understand why people balk at car subscription for some feature, but perfectly fine with leasing a car => which is basically a car subscription driven to its logical end?

Because that’s a choice with alternatives. This time they offer a “lifetime subscription”, not a purchase mind you! a subscription, next time they might not.

And since it’s a life subscription, does it transfer to the next owner? Or do they have to pay it again, a la Tesla? Will it get invalidated if I make a modification to the car?

[ExoticPearTree]

They said lifetime of the car. So they can decide the car lifetime is 5 years, or 3 years. Amd then charge you again for an “extended support” subscription.

[degamad]

The difference is that the bank can't suddenly decide that you owe them $800 each month instead of $720, but VW can decide that your subscription costs $100 instead of $20.

[ceejayoz]

And at some point the bank says “You’re done! Loan paid in full!”

[slt2021]

because they can do, but doesn't mean they will do that.

You know what else VW can do: price each car at million dollar MSRP minimum, to make more money, but they dont do that. What do you think holds them from jacking up prices to $1 mln ?

[degamad]

Jacking the price up before you buy allows you to decide not to buy, and to switch to an alternative instead. So VW has an incentive to keep up-front prices low.

Once you have bought the car, you are locked into paying the higher subscription costs, because the costs of switching are much higher than the increased subscription costs. There are no alternative suppliers for "increased performance" of your VW. Thus, the disincentive of lost sales is removed, and VW is not incentivised to keep subscription prices low.

(See also: Netflix)

[JohnFen]

I absolutely balk at these sorts of subscriptions. I'm allergic to subscriptions generally, and especially when the "subscription" isn't to compensate for the ongoing cost of a service, but to allow the use of something that I already own.

I would also never lease a car.

[jakub_g]

To my understanding, most people who do leasing (at least in EU) do it because it's much cheaper due to tax regulations (if you buy a car for the company you own).

[maxerickson]

It's because turning the hardware on or off based on the payment is more or less pure rent seeking.

I mean, lots of people here resent charging for software also!

[recursivecaveat]

You could let consumers reap the benefits of improved technology and let everyone have the full power of the physically produced car. In a truly competitive market this is what would happen. Imagine if a $30,000 car was sold today artificially limited to 20 horsepower because that's what the Model T speced out at, and it would be too expensive for us to produce and sell a physical 20hp model and a physical 200hp model. It is just an attempt to convince consumers to let companies bank all the dividends of technological progress.

[slt2021]

a lot of medical devcies are basically a single SKU, but with various features turned on/off based on license (bill).

same with cars, same parts with one SKU, but various features turned on/off allows car OEMs to make different price offerings at different prices to capture larger part of the demand curve

[Esophagus4]

Same with a lot of software: the binaries / SaaS are the same, but your features are determined by your license key and what your subscription plan is.

[JohnFen]

Yep. I detest that practice as well.

[Esophagus4]

I guess there are times I don’t mind it - for example, if there is a decent free plan, I feel like the enterprise / pro users are subsidizing me :)

[fho]

But how are you going to brag about your car when it is the same with or without subscription?

I saw that current VW models feature very prominent (and IMO ugly, unibrow style) LED strips.

Does the car light up in a different color if you pay for the subscription?

[ExoticPearTree]

If buy the premium package, they project “Money Money Money” in from of the car as you drive ;)

[mdp2021]

With the current market, for a price you can turn things off.

[fho]

Thaaaat makes a lot of sense. The unibrow with the illuminated VW logo is pretty ugly ;-)