Is the 'Subscription-Based' Heated Seat a Consumer Deception? ... Prohibition Bill Proposed in the US

Automotive Research Institute Industry Trend Report
US New Jersey Proposes Ban on HW Subscription Services

Tesla factory in Austin, Texas, USA

[Asia Economy Reporter Choi Dae-yeol] A bill has recently been proposed in the United States to ban certain subscription-based services for finished vehicles. This comes amid ongoing consumer complaints about business models that require drivers to pay to actually use features already installed at the time of new car delivery, such as heated seats or steering systems.

According to an industry trend report released on the 30th by the Korea Automotive Technology Institute, New Jersey Democratic House Representatives Paul Moriarty and Joe Danielsen introduced a bill last September to ban some subscription-based services for vehicle functions.

The bill allows subscription-based software services related to connectivity, which manufacturers must continuously update, or advanced driver-assistance systems (ADAS), but prohibits subscription services for hardware functions that do not incur separate costs. It targets manufacturers and dealers, including penalties of up to $10,000 for the first violation and $20,000 for the second.

The finished vehicle industry views subscription services as a potential main revenue source in the near future and is experimenting with various approaches. Tesla’s Level 2 autonomous driving service (Full Self-Driving, FSD) is a representative example.

Tesla has steadily improved autonomous driving performance through AI learning and has also raised the price of its autonomous driving service. Subscription services related to various infotainment features such as remote vehicle control, streaming, music and media content consumption, and telematics have also been introduced by various companies including Hyundai Motor, Kia, General Motors (GM), and Toyota.

Mercedes-Benz unveils power increase subscription service in the United States

While these subscription services are software-based, hardware services such as heated seats, steering wheels, and high-beam assist systems are also emerging. Mercedes-Benz has introduced a product that increases the rear wheel steering angle from 4.5 degrees to 10 degrees for a certain fee. In the U.S., some Mercedes-Benz electric vehicles offer a subscription service that increases motor output by about 20% for an additional charge.

Although automakers approach this as a new revenue structure, consumers have many complaints. They argue that since they already paid for the vehicle equipped with the parts that enable these functions, paying again is inappropriate. Some sarcastically say, “At this rate, will they start charging for brakes and airbags too?”

This bill is attracting attention because it is closely linked to the future business direction of automakers. If the bill passes in the upcoming committee next month, it is expected to influence public opinion both inside and outside the U.S., forcing automakers to change their business strategies.

Senior Researcher Yang Jae-wan of the Korea Automotive Technology Institute explained, “Although the passage of the bill is uncertain, it is expected to have an impact on consumer sentiment and industry business strategies. Since this bill is also related to New Jersey’s ‘Consumer Fraud Act,’ the outcome will clarify whether hardware subscription services are fundamentally deceptive to consumers.”

He added, “As consumers become accustomed to services connecting smartphones and vehicles, such as Android Auto and Apple CarPlay, automaker-led services have narrowed to areas directly related to the vehicle itself. This reflects the automakers’ efforts to secure continuous revenue streams after vehicle sales.”