Shulou(Shulou.com)11/24 Report--

On August 19, 2020, Guang Qi Wei announced that the comprehensive profit of hardware would not be more than 1%.

Some time ago, the unreleased Xiaomi car insiders also revealed that the hardware profit will not exceed 1%. After announcing a profit of no more than 5 per cent on mobile hardware, Xiaomi seems to be pursuing the same strategy in the automotive sector.

(photo Source: Xiaomi Automobile) of course, car companies are not here to do charity. Since there is almost no profit on hardware, they have to make profits back from software. But is the software charge really reasonable?

Consumers abhor, is the software charge reasonable? In Xiaotong's view, the only advantage of software charges for consumers is that after the decline in net profit on hardware, we can buy a car at a lower price, and we can choose whether or not to open software-paid projects.

As for the disadvantages, that's too much.

Xiaotong opposes charging for software, and the core factor is that we may still have to pay for software even though we have already paid for hardware.

For example, Tesla steering wheel heating, BMW seat heating, Mercedes-Benz rear wheel steering function, obviously the car hardware support, do not pay but can not be opened.

(photo Source: Tesla) car companies need to consider the overall cost, it is impossible to charge nothing for hardware, only for software. Guangzhou Auto Xilai and Xiaomi claim that the profit of hardware is not more than 1%. If there is no charge for hardware, then there is a high probability that the car will lose one at a time. As for making money by relying on software fees, no one is sure whether consumers are willing to buy the software features of cars, and repeated charges for hardware and software are almost certain.

More importantly, many functions are not buyout, but subscription. For example, the rear wheel steering price of Mercedes-Benz EQS is 4998 yuan per year, and Tesla's FSD has also been changed from buyout to subscription. This is the second problem that Xiao Tong is worried about. Car companies have turned buying a car into renting a car.

(photo Source: pixabay) in fact, there is a similar situation in the mobile phone field. Many App have changed the charging system from buyout to subscription, but there are very rich similar applications in the application market, and there are even some free ones. We can choose at will, and cars are different. We can't change the hardware of our car at will. If we don't have subscriptions, we really can't use some functions.

After a large number of basic functions are changed to subscription system, we may have to spend tens of thousands of yuan to unlock these applications every year. Why do we have to take on a "car loan" when we have bought a car?

The third problem that Xiaotong is worried about is that car companies are still reluctant to give up software charges because they have made a lot of profits in hardware. Xiaomi Group has announced that the comprehensive profit of mobile phone hardware will not exceed 5%, but the first quarter of 2022 shows that the gross profit of mobile phones has reached 11.2%. In fact, without data, we can see that the annual price reduction of 618 and Singles Day for Xiaomi mobile phones is far more than 5%, and how can the profit not exceed 5%.

(figure source: Xiaomi mobile phone) similarly in the automotive field, we do not know exactly how much cars cost, and we do not rule out the possibility that some car companies can use low hardware profit margins as a marketing gimmick while making high hardware profits. To convince consumers, car companies must be more open and transparent.

The software charge is a bit like the DLC charging rules of the game industry. At first, players angrily denounced DLC as unreasonable, clearly paid, but could not experience all the ways of playing the game. Game companies through the way to improve the playability of the ontology, won the recognition of consumers, even if we do not buy DLC, the main plot and play will not be missing, DLC is just rich play embellishment.

But soon the situation changed, DLC from the car decoration into the steering wheel, tires, do not buy DLC can not be a normal game. Xiaotong is worried that a similar situation will happen in the auto industry. without software subscriptions, cars will have only the most basic driving functions, just like the old cars of many years ago.

The car we spend a lot of money on, without paying an extra annual "car loan", will be no different from the old car many years ago, so why should we buy it?

Fortunately, not all car companies support software charges.

The current situation of software charges, car companies have different ideas to mention the car companies that charge for software. The first thing that comes to mind is Tesla FSD, which currently costs as much as $15,000 per year. Overseas luxury brands such as BMW and Mercedes-Benz are also keen on software charges, and some models even charge to turn on air conditioners remotely.

Back in China, there are also software charges, but they are mainly focused on the new forces of car building. For example, the BOP+ (enhanced Navigation Assistance) of Xilai Automobile started charging 380 yuan per month on July 1, which is not expensive compared to Tesla's FSD, but it is not less than 4560 yuan a year.

(photo Source: Weilai Automobile) Weilai CEO Li Bin is the founder of E-car. Born in the Internet industry, he has a keen sense of the tuyere of new energy vehicles. With years of experience in dealing with consumers, he founded Weilai Automobile, positioning the high-end market, and intends to conquer consumers with services. However, it takes a cost to provide services, while Xilai has so far failed to make a profit, and the choice of software charges may also be to reduce losses.

Coincidentally, the ideal of the new force of building cars, which is similar to the congenital condition of Weilai, is openly opposed to charging for car software. Ideal car CEO Li Xiang is the founder of Automobile Home and has dealt with consumers for many years. Based on the understanding of consumer demand, ideal cars are all "nanny cars", which are suitable for family users with higher spending power, and the add-on system will not have battery life anxiety.

(photo Source: ideal car) Li Xiang has said that self-driving or auxiliary driving is not a value-added function, but a basic system that should not be charged. According to Li Xiang's understanding, all the functions that come with the hardware are basic system functions and should not be charged.

With regard to Li's attitude, the ideal car "deserved" is the first new car-building force in China to make a profit.

Among the new forces of car building in China, many founders and executives are born in the Internet industry, and it is not surprising that they have a way of thinking about charging for software. many mobile games and App itself adopt the charging method of fishing in the sea, and they do not intend to retain users at all. The worst thing is to change the UI and change the name to go back on the shelves.

Traditional car companies, on the contrary, their products generally have few problems of adapting to App, which seems to be unsuitable for the arrival of the era of smart cars, but in terms of basic functions, traditional car companies generally do not use software fees.

Consumers are worried that when car companies see the benefits of software charges, they will collectively choose software fees, so that consumers can not avoid.

Will software charges be the future? Compared with the physical industry, the profit margin of the software industry is much higher, which is one of the reasons why many car companies open the software charging model.

However, Xiao Tong dares to say that domestic software charges are doomed not to become mainstream. There are two main reasons for Xiaotong. First, traditional car companies basically will not adopt this way, and few of the new forces of car-building can live to the end. Traditional car companies may not understand smart cars as well as the new power of building cars, but they know far more about consumers than most new powers. they understand the impact of software charges on word-of-mouth. Not all car owners can believe in cars like Tesla fans.

In 2022, Xiaopeng once announced that the XPILOT 3.0 intelligent driving assistance system would be upgraded for a fee, but soon changed it to standard, abandoning the software charge. Xiaopeng also understands that even if you want to charge for software, you have to wait until there are enough sales and consumers become dependent.

(photo Source: Xiaopeng Automobile) the second reason why Xiaotong is not optimistic about software charges is that the competition in the domestic automobile industry is much fiercer than abroad. Some time ago, because the price of Volkswagen ID.4 is lower in China than in Europe, many European consumers are out of balance and complain about Volkswagen online. In fact, there is nothing Volkswagen can do about it. The Chinese market is too competitive. If the price is a little higher, it may not be able to sell.

China's auto market is very open, and car companies from all over the world are welcome to enter the market, but up to now, only German and Japanese systems perform better in China, the American system is average, and Korean and legal systems perform poorly. Many overseas countries have restrictions, such as Li Bin's recent dissatisfaction that the United States does not allow Lulai cars to enter the local market.

Some luxury car owners may be insensitive to subscription fees, but Volkswagen certainly cannot accept subscription fees. Luxury cars may have many paid unlocking features in the future, but low-and middle-end models are most likely not. It is impossible to buy a car in 150000 and spend 15000 a year on autopilot, remote control, seat ventilation / heating.

This article comes from the official account of Wechat: ID:dianchetong233, author: lost Soul.

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.