Volkswagen to trial pay-on-demand charging for car functions

Volkswagen will test customer acceptance of pay-per-mile billing and on-demand charging for optional car functions as part of a subscription service pilot trial on the ID 3 electric hatchback this year.

The German firm has made the development of "data-driven" online business models a priority as it explores new revenue streams enabled by the new generation of electric cars that are permanently connected to the internet.

Boss Ralf Brandstätter said Volkswagen believes that such services could generate revenues "in the three-million-digit [euro] range by 2025" and offer "a new and profitable revenue source for Volkswagen."

Volkswagen will pilot a subscription service with the ID 3 in six German cities later this year. While several firms, including Volvo and Jaguar Land Rover, already offer subscription services featuring a monthly charge with no long-term commitment, Volkswagen will test a subscription service and two other business models.

The firm will also test pay-per-mile billing and charging for additional on-demand features, which it suggests could include "a charging flat rate or navigation services that can be booked as needed".

Certain Volkswagen Group models already offer the ability to pay for some functions, such as automatically dipping headlights, on certain grades of model, while several sat-nav systems have previously charged for functions such as new maps or live traffic. 

Explaining how Volkswagen could employ such systems in the future, sales boss Klaus Zellmer said: “Today you can get infotainment functions on demand, and there are features that can be activated like ACC [automatic cruise control]. Now if you have an ID 3 in the future, features such as travel assist, stop and go, lane assist and ACC can be added on top.

“Based on the date we get about the customer’s driving profile, we can also approach them and offer them different services. We make offers to customers who then come to us. For example, you have a customer with a battery-powered vehicle, and if we notice he does long journeys, we can provide him with additional range, which we can do digitally.”

The system will tie in with Volkswagen’s commitment to offering regular over-the-air software updates to future EVs. Starting later this year, the firm will offer such updates to the ID 3 and ID 4 every 12 weeks. 

Volkswagen is aiming to further expand charging for in-case functions in the future through its Project Trinity programme. That is a new generation of EV that will be sold in a largely standardised specification, with virtually all of the features then available as online-enabled upgrades.

Volkswagen has also pledged to further expand on its online car sales services.