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andjd | 2 years ago

It's fine for automotive companies to maximize their profit margin. If they have smaller margins than google, that's probably because google is nearly a monopoly, and there's fierce competition in the automotive space.

A key difference here is a car is a product that we buy and own. It doesn't cost Mercedes an ongoing cost every month to support these hardware features they change a monthly fee to unlock, and so the monthly fee doesn't provide additional value. To the extent it does, it's because the manufacturers are artifically limiting their product. Compare this to, say, and Adobe Creative Cloud subscription. With that, you're getting access to cloud services that costs Adobe to keep running, it also gets you access to new features and security updates. Whether or not you like Adobe's business model, this provides a justification for the subscription model that is simply absent in the automotive space.

Going back to the competition point, even if you just look at the monthly fee as cost shifting, it lets the manufacturers advertise a price that's lower than what the consumer is going to pay.

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