Photo: Out of Spec Reviews via YouTube
Carmakers are looking to make the software an important revenue stream, but Rivian thinks there are limits to how far you can go with it. Autonomous software is best suited for monetization, thinks Rivian CEO RJ Scaringe. His company is already hiring autonomous-driving engineers to expand its self-driving efforts.
After Tesla demonstrated how to make money from software subscriptions, every carmaker under the sun thought of ways to make more money by selling subscriptions. As some carmakers discovered, there are not many things you can charge a monthly fee for. BMW is probably the best example after it irked its customers by trying to charge them for using Apple CarPlay.
After that, there was a massive backlash, and the German carmaker was forced to give up. Apple CarPlay and Android Auto are free to use today in BMW vehicles. Everyone thought that was a harsh lesson to learn. But did BMW learn anything from it? A few years later, they tried charging people for seat heating. This made BMW the laughing stock of the automotive industry, and everyone is referring to their mistake.
The latest to do so was Rivian's CEO, RJ Scaringe. When Henry Roberts from Truist Securities asked about the monetization opportunities in the software segment, Scaringe said that people often overestimate how much vehicle manufacturers can charge for every software feature. Scaringe reminded everyone of the BMW blunder during the third-quarter earnings call.
"The idea of charging for heated seats or charging for sort of a binary 1 or 0 like turning a feature on and off, we don't think that's going to land well with consumers, and we don't think that's going to be a sustainable model for charging for software," Scaringe told the audience.
Instead, Rivian thinks that software subscriptions are better suited for complex features that require a lot of development. Scaringe identified autonomous driving as the best example, with other features like augmented reality following closely. Rivian's CEO thinks autonomous driving features can be monetized via a monthly subscription or an upfront payment. This sounds a lot like Tesla's FSD, which can be activated by paying a $12,000 fee upfront or a $199 monthly subscription.
Rivian is actively hiring autonomous driving experts, with 19 open positions advertised on its career page. Based on the job descriptions, Rivian is looking to expand in areas from machine learning to sensors, simulation, behavior, and data mining. One of the advertised positions is for Principal Product Manager, Autonomy, a high-paying job for someone who will shape Rivian's autonomous driving strategy. All positions are in Palo Alto, California, an area with a high concentration of talent.
For now, Rivian's Drive+ advanced driving assistance system (ADAS) lags behind Tesla's FSD software and, in some ways, even the Autopilot. Rivian owners specifically complain about automatic lane change behavior, which needs more polishing. They would also love features like automatic lane centering on unmarked roads or decent lane-keeping assistance like Tesla offers.
After that, there was a massive backlash, and the German carmaker was forced to give up. Apple CarPlay and Android Auto are free to use today in BMW vehicles. Everyone thought that was a harsh lesson to learn. But did BMW learn anything from it? A few years later, they tried charging people for seat heating. This made BMW the laughing stock of the automotive industry, and everyone is referring to their mistake.
The latest to do so was Rivian's CEO, RJ Scaringe. When Henry Roberts from Truist Securities asked about the monetization opportunities in the software segment, Scaringe said that people often overestimate how much vehicle manufacturers can charge for every software feature. Scaringe reminded everyone of the BMW blunder during the third-quarter earnings call.
"The idea of charging for heated seats or charging for sort of a binary 1 or 0 like turning a feature on and off, we don't think that's going to land well with consumers, and we don't think that's going to be a sustainable model for charging for software," Scaringe told the audience.
Instead, Rivian thinks that software subscriptions are better suited for complex features that require a lot of development. Scaringe identified autonomous driving as the best example, with other features like augmented reality following closely. Rivian's CEO thinks autonomous driving features can be monetized via a monthly subscription or an upfront payment. This sounds a lot like Tesla's FSD, which can be activated by paying a $12,000 fee upfront or a $199 monthly subscription.
Rivian is actively hiring autonomous driving experts, with 19 open positions advertised on its career page. Based on the job descriptions, Rivian is looking to expand in areas from machine learning to sensors, simulation, behavior, and data mining. One of the advertised positions is for Principal Product Manager, Autonomy, a high-paying job for someone who will shape Rivian's autonomous driving strategy. All positions are in Palo Alto, California, an area with a high concentration of talent.
For now, Rivian's Drive+ advanced driving assistance system (ADAS) lags behind Tesla's FSD software and, in some ways, even the Autopilot. Rivian owners specifically complain about automatic lane change behavior, which needs more polishing. They would also love features like automatic lane centering on unmarked roads or decent lane-keeping assistance like Tesla offers.
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