GM is quietly becoming a subscriptions company
General Motors is shifting its business model toward high-margin software subscriptions, specifically through its OnStar and Super Cruise services. The company is seeing significant revenue growth from these digital offerings, which provide higher profitability compared to traditional vehicle sales.
Why it matters
This highlights a broader industry trend where automakers are pivoting to become software-driven companies to ensure long-term recurring revenue.
Mary Barra, GM's CEO, boasted significant gains in the company's subscription base. FREDERIC J. BROWN/AFP via Getty Images GM said OnStar generated about $800 million in revenue in the second quarter. It sells two software systems: autonomous driving with Super Cruise and safety features with OnStar. GM told Business Insider it plans to add features through updates over time, reducing the need for new car parts. General Motors has been pulling a Tim Cook and boosting its software and subscription business. During the automaker's Tuesday earnings call , executives highlighted the rapid growth of OnStar and Super Cruise, its two most popular software services. Subscriptions are increasingly important to automakers. Unlike a car sale, which happens only every few years, they can keep bringing in high-margin revenue long after a customer drives off the lot.
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