Tesla Puts a Price on Connectivity: $9.99 a Month
The free ride is over for Tesla buyers in terms of in-vehicle internet hotspots and related connectivity services.
The electric vehicle maker has offered such features at no charge since the high-end Model S debuted in 2012. Initially, the company indicated that the freebies would be cut after four years. That didn’t happen. Instead, the trend has continued unabated with the Model X crossover and more affordable Model 3 midsize car, even as more features have been added.
All Good Things Ending?
In mid-2018, Tesla announced but didn’t implement a paid premium content plan. The company now appears to be moving forward with that initiative. Electrek reports that owners have begun receiving notices that their “complimentary 30-day trial of Premium Connectivity” will end early next year. After that, it will cost them $9.99 per month to access streaming music and video content, high-end mapping (such as satellite-views and real-time traffic visualization), in-vehicle wi-fi and over-the-air (OTA) software updates as they become available.
Tesla Model 3. Source: Tesla.
The good news is that owners who purchased any Tesla model prior to July 2018 will continue to receive free premium content for the life of their EV. And all owners, regardless of purchase date, get the carmaker’s base connectivity package—more mundane maps and navigation—Bluetooth-enabled multi-media and OTA for safety critical features.
Tesla took a similar tack with its Supercharger stations, initially offering unlimited free access to the quick-charge network, then gradually turning to a pay-per-use model.
Tesla’s connectivity strategy is part of a larger industry battle about who supplies, owns and ultimately makes money on connectivity services. As OEMs try to make cars more like smartphones and other consumer electronic devices—with frequent and inexpensive updates—telecommunication firms, startups and traditional suppliers have raced to the forefront, providing the underlying tech and/or content.
Most automakers now offer free Apple CarPlay and Android Auto smartphone interfaces. BMW, one of the few holdouts, earlier this year announced plans to charge customers as much as $80 per year for CarPlay, claiming the fee would help it hold down the sticker price of its luxury models. Not surprisingly, customers balked at being taken on a ride. BMW backtracked and, as of last week, made CarPlay standard on all vehicles in the U.S.
Demand for connectivity features is accelerating to enable telematic services as well as advanced V2X and autonomous driving technologies, experts noted earlier this year at AutoBeat’s “Connecting the Dots” symposium. Potential benefits include improved safety, reduced traffic congestion and greater convenience.
Volkswagen AG’s namesake brand plans to launch its own car-sharing service next year and is developing an integrated software control program to help coordinate vehicle sensors and autonomous driving technologies.
Honda Motor Co. is launching a “SmartCharge” pilot program that allows customers to coordinate charging times for electric vehicles and plug-in hybrid for non-peak grid times.
China car-sharing giant DiDi Chuxing plans to invest $1 billion into its new Xiaoju Automobile Solutions business.