Multiple Automakers Raise Prices for Smart Driving Packages; Need to Clarify Boundaries of Pay-for-Feature Models

Recently, automakers including BYD, XPeng, and Li Auto have successively raised prices for their advanced intelligent driving option packages, with most increases exceeding RMB 2,000. This move reflects the accelerating shift of the smart vehicle industry into the “software-defined vehicle” era, where software-based services—such as over-the-air (OTA) updates, intelligent driving features, and in-car ecosystem subscriptions—are increasingly becoming new revenue streams for automakers. Amid persistent margin pressure on traditional vehicle sales, high-margin and cash-flow-stable software subscription services have drawn significant attention from automakers. Data shows that the domestic auto industry’s sales profit margin dropped to 3.2% in Q1 2026. In contrast, some automakers report software service gross margins exceeding 60%. Tesla’s 2025 financial report revealed that its Full Self-Driving (FSD) subscription base surpassed 5 million users, generating over USD 12 billion in revenue with a 70% gross margin—far higher than the 23% margin from its vehicle business. Market research firms project the global automotive software market to grow from USD 19.8 billion in 2025 to USD 56.5 billion by 2035. Technologically, the widespread adoption of centralized electronic/electrical (E/E) architectures has enabled hardware-software decoupling across entire vehicles, granting them full-domain OTA capabilities that support continuous software iteration and feature-based monetization. However, certain automakers have sparked controversy during their push for feature-based monetization. For example, BMW previously introduced subscription services for seat heating and steering wheel heating but discontinued them following strong consumer backlash. Mercedes-Benz’s EQS came standard with rear-wheel steering hardware but initially enabled only partial functionality by default, requiring an additional payment to unlock full performance—a policy later rescinded. Ford faced criticism for using software locks to disable front trunk access on certain EV models, compelling users to pay for activation. Moreover, basic functions such as in-car ETC activation, microphone-free karaoke, zonal seat massage control, and remote engine start have also been placed behind paywalls. Critics argue these practices blur the line between essential hardware functions and value-added services, potentially infringing upon consumers’ rights to informed choice and fair transactions. The industry generally agrees that software services capable of continuous iteration—such as advanced intelligent driving features (e.g., urban navigation pilot, automated parking), content ecosystem offerings (e.g., streaming memberships, games, themes), and personalized performance tuning (e.g., throttle response, suspension mode optimization)—can be reasonably monetized. Conversely, fixed hardware functions that are finalized at production and require no ongoing maintenance—like seat heating or front trunk access—should not incur additional fees, as their costs are already embedded in the vehicle’s purchase price. The *Compliance Guidelines for Pricing Practices in the Automotive Industry*, released in early 2026, explicitly require automakers to disclose all post-purchase paid features, free trial periods, and pricing structures at the point of sale. It prohibits ambiguous marketing and restricts loss-leading sales tactics aimed at undercutting competitors. Establishing a standardized feature-monetization model requires coordinated efforts: automakers should adhere to the principle of “core features permanently free + value-added services available via optional subscriptions” and avoid pre-installing but locking hardware functionalities; regulators must refine classification standards for vehicle features and rigorously investigate false advertising and forced payments; and consumers should proactively review configuration details, rationally distinguish service types, and assert their legal rights when necessary. Feature-based monetization in automobiles is an inevitable trend in industrial transformation. The key lies in clearly defining charging boundaries, balancing commercial interests with consumer rights, and steering the industry toward a transparent, standardized, and sustainable development path.