As the lines between Detroit and Silicon Valley blur, the automotive industry continues testing out the boundaries between new sources of revenue and customer satisfaction with the "appification" of vehicles.
"Appifying" is gaining renewed attention as electric-vehicle pricing comes under the microscope in the aftermath of tax incentives and price caps included in the Inflation Reduction Act passed by Congress in August.
A growing array of features and functions available in cars and light trucks can now be activated and enabled digitally through manufacturer apps and third-party online services on a subscription basis. As the phenomenon evolves, it promises to leave an indelible mark on the economics of conventional cars and EVs.
The rub, of course, hinges on the fact that services delivered digitally can also be taken away, raising interesting questions about what exactly consumers are buying when they make a connected-car purchase.
For the most part, this early action in vehicle apps revolves around offerings familiar to consumers' digital existence. Consumers are used to paying a monthly fee for their music, video entertainment and internet in their vehicles — just as they do for their homes.
But as connected-car features grow, functions that were once considered an intrinsic part of a vehicle purchase — such as keyless fobs — are now value propositions that consumers can rent but not own.