- GM highlighted rapid growth of OnStar and Super Cruise software services during its earnings call.
- Subscriptions provide high-margin recurring revenue, unlike one-time car sales.
- GM's software business retains about 70 cents of every dollar in revenue, a rare profitability level in the auto industry.
- OnStar brought in ~$800 million in Q2, up 20% YoY, with expected 1 million new subscribers this year.
- Super Cruise grew faster, adding 70,000 subscribers in Q2 and aiming for 850,000 by year-end, with 70% revenue increase.
- 30-40% of eligible owners continue paying for Super Cruise after the free three-year period.
- Super Cruise will be standard on high-end trims of Chevrolet Silverado and GMC Sierra pickups, adding ~160,000 users.
- GM sees multiple growth levers to improve margins and reduce cyclicality.
- The push for subscriptions comes as EVs reduce maintenance revenue, prompting new profit streams.
- GM eases customers into subscriptions with free OnStar Basics for up to eight years, then paid tiers like Connect Plus ($19.99/month) and Super Cruise ($39.99/month).
- Other automakers like Tesla, Ford, Mercedes-Benz, and BMW are also expanding subscription services.
- Wall Street reacted positively, with GM stock rising 8.8% after the earnings call.