RESEARCH REPORT

In brief

In brief

  • OEMs making bets on the monetization of digital add-on-services for vehicles. But it’s still unclear whether customers will be willing to pay for these.
  • Our research suggests that the willingness to pay for add-on services does exists – but it varies between markets (and is greatest in China).
  • We therefore recommend OEMs start experimenting with add-on services, in markets where the chances of success are highest.


The perception: you can’t sell, yet

Currently there is a myth that "the time is not there yet to sell in-vehicle", however, our survey and views from customers themselves suggest otherwise – depending on their location, and age. Here’s our results and what OEMs or mobility service providers need to do, especially in the Chinese marketplace.

Our survey: showing drivers’ willingness to pay

In our survey of over 7,000 respondents across the US, Europe and China we asked our respondents for their interest in and willingness to pay for add-on services/upgrades.

Our broad selection of add-on services included everything from video content and music streaming (e.g. Netflix and Spotify) to wellness offerings (e.g. massage seat), to catering or hospitality services (e.g. Starbucks and McDonalds) and hotel services. While our upgrades to autonomous vehicle rides included premium vehicle, personalized entertainment, personalized experience, onboard wellness, and an advertisement-free ride.


Share of respondents aged 18-37 that are interested in at least one add-on service category for an autonomous ride

NON OWNERS PREMIUM OWNERS NON PREMIUM OWNERS
US 93% 93% 85%
EUROPE 83% 95% 81%
CHINA 99% 99% 99%

Share of respondents aged 18-37 that are willing to pay an up-charge for at least one of five add-ons/upgrades

NON OWNERS PREMIUM OWNERS NON PREMIUM OWNERS
US 57% 58% 45%
EUROPE 43% 60% 42%
CHINA 86% 83% 85%

Results per category of owner

Premium car owners

Overall, 96% of premium car owners express an interest in using at least one out of five add-on services, but only 67% say they’d pay a upcharge for upgrades. But: Results vary by region!

Non-premium car owners

86% saying they’d use an add-on service; only 51% of non-premium owners are willing to pay an upcharge. Again, results vary by region.

Non-owners

91% of respondents expressed an interest in using an add-on service; 64% said they’re willing to pay for upgrades. Here, too, results varied by region.

View All

Premium car owners

They’re interested…
In the US, 93% of premium car owners say they are interested in at least one add-on service category for an autonomous ride (that includes hotel service, music/movie streaming, catering, wellness, etc.) In Europe, 95% of premium car owners are interested, while in China it increases to 99% of owners wanting add-on services. This clearly refutes the perception that people aren’t interested in add-on services yet.

Half or more "will pay"…
In the US, however, only 58% of premium car owners say they are "willing to pay an upcharge" for at least one of five add-ons/upgrades: Premium brand autonomous vehicle; personalized entertainment, e.g. Netflix or Spotify account in the car; personalized experience (e.g. a vehicle that automatically adapts to preferences regarding sound volume, temperature, seat adjustment); onboard wellness (e.g. massage seat; and advertisement-free ride). In Europe a slightly higher 60% are willing to pay an upcharge for at least one of these add-ons; while in China a far higher 83% of premium car owners are willing pay an upcharge for add-ons/upgrades.

As things stand, the only market where the vast majority of riders is currently "willing to pay" extra for add-ons or upgrades is in China.

Non-premium car owners

They’re slightly less interested…
In the US, 85% of non-premium car owners say they are interested in at least one add-on service category for an autonomous ride (e.g. hotel service, music/movie streaming, catering and wellness). In Europe it is 81%, but in China it is highest again with 99% of non-premium car owners are interested in at least one add-on service.

They’re far less willing to pay…
In the US, only 45% of non-premium car owners are willing to pay an upcharge for at least one of five add-ons or upgrades, such as: premium vehicle, personalized entertainment, personalized experiences, onboard wellness, or advertisement-free ride. In Europe it’s even lower at 42%, while in China it again jumps to 85% of non-premium car owners are willing to pay an upcharge for at least one add-on or upgrade.

Non-Owners

They’re nearly as interested as premium owners…
In the US, 93% of non-owners would consider at least one add-on service category for an autonomous ride (e.g. Hotel Service, Music/Movie Streaming, Catering or Wellness). While only 83% in Europe would consider it, but again in China 99% of non-owners would consider at least one add-on service.

But their willingness to pay fluctuates…
In the US, only 57% of non-car owners would be willing to pay for at least one of five add-ons or upgrades. And in Europe, only 43% would be willing to pay, while in China a far higher 86% of non-owners would be willing to pay. And so the trend continues.

Results per Region

The results are clear: The willingness to pay for add-on services is highest in China.

USA

87% of customers are interested in at least one add-on service category for autonomous rides. However, only about half of all respondents also said they were willing to pay an up charge for services.

Europe

Similarly, 85% expressed interested in at least one add-on service category for autonomous rides, while only 46% said they'd pay extra.

China

Chinese customers are most interested and most willing to pay extra: 99% expressed interest in add-on services, 84% said they'd be ready to pay an up charge for them.

View All

Our observations: China stands out

There is a great interest in "wanting add-on services" like music and video streaming, wellness, catering and hotel services. The question in the future will be: Will transportation itself become the add-on to service or will OEMs be able to sell services as add-on to rides? As things stand, the only market where the vast majority of riders is currently "willing to pay" extra for add-ons or upgrades is in China. So, how should OEMs respond?

Our recommendations

The demand warrants piloting
In a future of autonomous mobility, add-on services will become a major source of revenue. Since demand is already there, we recommend that OEMs can already pilot and refine those service offers to be ready once autonomous vehicles hit the market.

OEMs in China need a separate approach
It is our recommendation that OEMs in China should pilot Uber-like services where transportation is bundled with additional services such as wellness, overnight stays, entertainment or catering. This way OEMs can learn about riders’ preferences and price sensitivity. Furthermore, OEMs can test whether a cooperation model with industry incumbents (e.g. Hilton for hotel services, McDonalds for food, etc.) or self-sourced service add-ons are the way to go.



About the Authors

Axel Schmidt

Senior Managing Director – Global Mobility Industry Lead


Juergen Reers

Managing Director – Mobility X.0 Lead


Alexander Huber

Managing Director – Automotive


Daniel Tegtmeyer

Senior Manager – Automotive


Tobias Kruse

Business Design Director – Fjord, Regional

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