General Motors is placing increasing emphasis on software and connected services as the business becomes significantly more profitable than traditional vehicle sales. The automaker says its digital services generate substantially higher margins, supporting its strategy to expand subscription-based offerings throughout a vehicle’s ownership.
Software Becomes a Key Revenue Driver
According to GM, its software and connected services business retains about 70 cents of every dollar it earns. By comparison, vehicle sales typically generate profit margins of just 4 to 10 cents per dollar, highlighting why the company continues investing in digital services.
Earlier this year, GM said its subscription business could eventually generate more revenue than vehicle sales. The company estimates that each connected-services subscriber produces approximately $20 in monthly revenue, creating recurring income after a vehicle has been sold.
OnStar and Super Cruise Drive Growth
A significant portion of GM’s connected-services revenue comes from OnStar and Super Cruise.
OnStar generated approximately $800 million during the second quarter of the year. Meanwhile, Super Cruise continues adding paying subscribers after complimentary trial periods end.
GM expects to finish 2026 with approximately 13 million OnStar subscribers and around 850,000 Super Cruise subscribers, underscoring the growing importance of connected services within the company’s business.
Connected Services Continue to Expand
Although connected vehicle technology has advanced rapidly, adoption of subscription-based services has grown at a slower pace. GM believes that leaves additional room for future growth as more customers adopt connected vehicle features.
Automakers Take Different Approaches
GM is not the only automaker pursuing recurring software revenue. Tesla, Ford, Mercedes-Benz, Audi, and BMW have all introduced subscription-based features or software upgrades that customers can activate after purchasing their vehicles.
BMW has acknowledged that its subscription-based service was a mistake, while Volvo has criticized automakers that offer such services.
At the same time, New York Assembly Bill A1095 seeks to prohibit automakers from placing hardware features behind software paywalls.
Conclusion
General Motors continues to expand its software and connected-services business as it seeks higher-margin recurring revenue through offerings such as OnStar and Super Cruise. With millions of subscribers already using its connected services, the company views software as an increasingly important part of its long-term business strategy alongside traditional vehicle sales.
