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Originally Posted by Martinjlm
I would love to debate Deloitte on this one. The only reasons why EVs are more expensive today then ICE are - Economies of scale
- Depreciation of assets
To be fair, they are correct on the overall premise, that automakers are banking on over the air (OTA) content delivery as a huge revenue source. It’s just that their rationale that this is because of electric vehicles that is very flawed. The two concepts reached the market at pretty much the same time (thanks Tesla) but one technology path does not require the other technology path.
The cost to manufacture EVs is coming down with each generation of EV. At the same time, the cost to manufacture some ICE vehicles is going up due to additional emissions content that has to be added to meet new CAFE and emissions targets. That same content does not need to be added to EVs because there’s no tailpipe emissions. When the cost reaches equilibrium with the cost to produce ICE, the cost difference will quickly swing in favor of EV because of fewer parts needed as well as fewer platform architectures required by each automaker.
I would also note that the idea that the subscription business model requires EV is misguided. It doesn’t. Several automakers are already using that business model for ICE vehicles sold in regions other than North America. Even in North America the same OTA delivery of upgraded functionality is already being used to manage recalls without the vehicle ever coming into the dealership. It can easily be used to deliver and/or restrict optional functionality. |
You mention that OTA functionality is already in ICE models and is nothing new or unique to EVs. I would have to say that seems like a weak justification for what is coming or planned or already in EVs with subscriptions, upgrades, and "new revenue" streams.
Other than On-Star and Serius XM radio, I know of no other ICE OTA upgrades that charge a fee. What you mention is already in ICE seems benign and isn't even close to what can be done with EVs and subscriptions. ICE restrictions on features and conveniences that cost extra similar to what we have heard about EV fees? I think that is quite a stretch. The auto buying public would be up in arms. Look how the mandatory On-Star is already being challenged and unpopular. This type of thing growing into a monster is primarily being talked passed as just a normal expected part of EV ownership, or some abomination of ownership, that has no real roots or history in ICE vehicles.
It's a con-job on steroids for the EV future.