[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)