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Car subscription services: A slow, expensive start — but the potential is huge

Americans are used to paying for subscriptions — to magazines and cable television, for instance — but experience shows they'll cancel when the price of admission gets too high, or there are more tempting alternatives. Cord cutters ditched nearly 1.5 million pay-TV subscriptions in 2017, according to a survey by Leichtman Research Group. Cable TV started out cheap with basic offerings, and then got expensive. The auto industry's subscription offerings are new, but they're starting out costly, and not price-competitive with traditional leasing. The upside is that they take the hassle out of car ownership for busy people by letting the service take care of maintenance, insurance, licensing and taxes. And they give consumers choice, often allowing relatively painless switches between different cars in the automakers' lineup. Subscription services also point the way toward an ownership-free auto experience, and offer an easy transition to a potential world where ride- and car-sharing will be dominant. Subscriptions are here to stay, but consumers may take a while to "get" them. Lincoln's subscription service for lightly used 2015 to 2017 models, offered through the Ford-owned Canvas beginning this year, got off to a slow start. Many early subscribers canceled. Last month, Cadillac announced it would " temporarily pause" its $1,800-per-month Book subscription service for "adjustments" as of December 1. According to the Wall Street Journal, "Snags with the back-end technology used to support the service made some customer-service functions tedious and time-consuming, adding costs for the company." The challenge for automakers is to come up with a strategy that offers consumers a compelling, affordable option to regular ownership, and one that can also make a profit. I think they'll find that sweet spot, but they're not there yet. Jack Nerad, former executive editorial director at Kelley Blue Book and author of " The Complete Idiot's Guide to Buying or Leasing a Car," points out that "A lot of people expected that subscriptions would be very valuable for people who wanted inexpensive transportation, but the reality is quite the opposite. Subscriptions are offering more choices for the wealthy.

Ford, GM still doing new business with Takata amidst airbag crisis

Lengthy vehicle development times make it difficult for automakers to cut and run from the supplier. You might expect automakers to be fleeing any connection with beleaguered supplier Takata in the wake of the company's exploding airbag inflator crisis. After all, with a Senate hearing, pending lawsuit, plummeting stock value and demand for a national recall, the tier-one supplier isn't at its strongest right now. However, years of cooperation mean that automakers are standing by Takata, and necessity may be playing a role, as well. About 39 percent of Takata's business comes from airbags, and seatbelts make up another significant chunk of the operation too, says Bloomberg. The long-term relationships and lengthy vehicle development times make it difficult for automakers to cut and run from the supplier. "Takata has so much product breadth that I don't really see that they could just disappear," said AutoPacific analyst Dave Sullivan to Bloomberg. For example, Takata helped develop the unique front center airbag with General Motors in models like the Chevrolet Traverse and Buick Enclave. Outside of safety tech, it is also a partner with Ford on the adaptive steering system available on the upcoming 2015 Edge. These long-lasting partnerships make change difficult now that there's a problem. According to Reuters, automakers claim it would take a year or longer to set up with a different supplier for replacement airbag inflators. Switching to a completely different part for the repairs might not be a viable option either, because of the engineering time needed. BMW is taking action, though. According to Reuters, the Bavarian brand is working with the supplier to move inflator production from Monclova, Mexico, to a Takata factory in Freiburg, Germany. The Mexican plant may be the source of some of the faulty parts. News Source: Bloomberg, ReutersImage Credit: Jens Meyer / AP Photo BMW Ford GM Safety Takata airbag recall

Plug In 2014: BMW i DC Fast Charger is poised to change the EV game

It looks like it's just a blue box on a pole, but BMW's new i DC Fast Charger represents a much bigger deal than just the lowest-cost SAE Combo Charger on the market. BMW sees it as the key to getting more drivers into electric vehicles. As Robert Healey, the EV infrastructure manager for BMW of North America told us, "For [BMW], the future is clear. DC charging really is the future." "DC charging really is the future." – Robert Healey, BMW We spoke with Healey at the Plug-In 2014 conference in San Jose, CA last week about the promise of the new $6,548 DC fast charger. "The strategy is pretty simple," he said. "BMW wants to get as many DC Fast Chargers out there as possible. We're not in the charging business, we're in the EV business and to support the sales of our cars, we have identified some key areas: home charging, public charging and assistant services for EV drivers." That's why the first of the new blue boxes will be installed at the 285 i dealers in the US, many of whom already installed the cables needed for fast charging when they put in the Level 2 chargers, said BMW's Cliff Fietzek, manager of connected eMobility. Even if you haven't gotten a site ready for a DC fast charger, the installation costs for BMW's unit are lower because you don't need to pour concrete (for the wall unit) and the SAE Combo connector plug costs "significantly" less than the competing CHAdeMO plug, Fietzek said. One minor drawback to the BMW DC fast charger compared to the more expensive traditional, full-size DC fast chargers is that the 24kW BMW fast charger allows you to charge to 80 percent full in 30 minutes, while the bigger units can do the job in 20. The good news for EV drivers with SAE Combo cars (which, in the US, means the Chevy Spark EV and the VW e-Golf) is that any driver with a Combo plug car and a ChargePoint card will be able to use the BMW stations. In fact, BMW is talking with both GM and VW on where to install SAE Combo stations in the US so that there is minimal duplication of effort. In other places, BMW is working with other automakers, including Nissan, which uses a competing fast charging standard. "In Great Britain, we are installing triple chargers, the CHAdeMO, SAE Combo and the high-power, three-phase AC that can go up to 43 kW to support the Renault [EVs] and others," Fietzek said.