VW mulls tech charges for users

LIKE paying a subscription for satellite navigation, the use of over-the-air (OTA) delivered services in cars, such as autonomous driving functionality, may be “billable” in the future, according to Volkswagen.

The Wolfsburg-based manufacturer says the increasing adoption of OTA technology leaves the way clear for carmakers to start charging for these types of services and that OTA technology opens the door to charging for a wide range of “enhancements” delivered remotely.

If proven, OTA technology would become a new, possibly large revenue stream for car-makers and would facilitate charging customers in a manner similar to a taxi, rather than by annual fees.

But imperfections in the system and other issues have slowed the progression of the technology.

Volkswagen is, however, on the front foot with this development and is working to build an operating system that is capable of frequent over-the-air updates to enable enhancements such as full autonomous driving for a set distance.

Cariad, VW’s software provider, believes the company can monetise future software developments by offering customers pay-as-you-go autonomous driving technology.

“There is a new business model already out there – a subscription model, or function-on-demand – where you can drive autonomously if you want, for the next 80km; we would support that,” said Cariad CEO Dirk Hilgenberg in an interview with Bloomberg.

Level 4 or 5 self-driving options are not yet offered by VW, but Hilgenberg said it was possible to see that OTA technology would provide an opportunity to offer other services to consumers who are freed from driving the vehicle.

“You have to make sure to have what we call a digital services platform that lets the outside world in – Google, Apple, Amazon – where you can bring your accounts to stream and be entertained, or where you can work with office products, do a video conference, or prepare yourself for the next meeting. This is the product we want to sell. The product is our platforms,” he said.

Volvo Cars has already acknowledged that it will charge a subscription for Ride Pilot, their full autonomous driving functionality product that will be available on the forthcoming full-electric flagship SUV.

Henrik Green, Volvo's head of advanced technology, said the car-maker is still debating what to charge for Ride Pilot, which it anticipates will be popular once availability issues are overcome.

According to Autonews Europe (ANE), VW Group CEO Herbert Diess has said the company can only remain a leading automaker and bypass rival Tesla if it steps up its software game. That makes the company’s Cariad unit a linchpin of its long-term success. But according to the publication, things have not gone smoothly thus far.

The division – set up in 2020 after a previous digital push went awry – introduced a toolkit for VW’s ID series of electric cars, including the first model, the ID3, which debuted with missing features, the report says.

Development of a premium software architecture has been plagued by infighting, delaying models including a full-electric version of Porsche’s Macan compact SUV, says ANE.

VW is working to build an operating system that is scalable across its brands and capable of frequent over-the-air updates to enable enhancements such as driver-assistance features – areas where Tesla is well ahead, the report says.

“We have vehicles starting from the entry level to the latest luxury Bentley, which of course have very different software and hardware needs,” said Mr Hilgenberg.