GM's Bold Vision: A Netflix-Sized Subscription Business by 2030

General Motors' Expanding Subscription Services

General Motors anticipates substantial growth in revenue from its in-car subscription offerings. The company projects nearly $2 billion in revenue this year, with expectations reaching up to $25 billion by the decade's end.

This projected figure, announced on Wednesday, positions GM alongside prominent subscription-based companies like Netflix, Peloton, and Spotify.

Current Subscriber Base and Future Growth

Currently, GM has 16 million vehicles operating in the United States and Canada. Approximately 25% of these – totaling 4.2 million vehicles – are driven by owners who actively utilize subscription services.

This information was shared by Alan Wexler, Senior Vice President of Innovation and Growth at GM, during the company’s investor event on Wednesday.

Further expansion is expected, particularly with the upcoming launch of the Ultifi software platform in 2023.

Ultifi will facilitate an improved subscriptions platform and enable over-the-air software updates for vehicles.

Existing Subscription Services

GM’s present subscription platform encompasses services such as OnStar.

OnStar, a GM subsidiary, delivers in-vehicle security, emergency assistance, and navigation capabilities.

Customer Demand for Bundled Services

GM’s research indicates a strong customer preference for selecting multiple services. A study involving thousands of customers presented them with 45 distinct feature and service options.

On average, participants opted for a combination of 25 different products and services.

“Our findings suggest that customers are prepared to spend an average of $135 monthly on products and services, given a compelling and diverse selection,” stated Wexler.

Market Potential and Revenue Projections

By 2030, GM forecasts that 30 million of its vehicles in the U.S. will be equipped with connected car technology.

This translates to a serviceable addressable market valued at $80 billion.

GM aims to generate an additional $20 billion to $25 billion in incremental revenue.

Of this, $6 billion is anticipated from insurance offerings, with the remainder stemming from one-time purchases and ongoing subscriptions.

Expanding Service Offerings

Beyond OnStar, GM intends to target customers interested in Maps+.

Maps+ is an in-vehicle, app-based navigation solution launched in April, compatible with Alexa voice control.

Significant revenue opportunities are also foreseen within the commercial sector.

Specifically, GM’s OnStar Vehicle Insights service provides fleet management solutions for both GM and non-GM vehicle fleets.

“This service alone addresses the requirements of a substantial market,” Wexler emphasized.

“Hundreds of thousands of connected fleet vehicles, generating data from millions of trips and hundreds of millions of miles, provide significant monetization potential.

We are distinguished by the sheer scale of data available to us, and we intend to capitalize on it.”