General Motors has made its money the traditional way: building and selling cars. Instead of relying on one-time vehicle sales, manufacturers can now generate recurring monthly revenue long after a customer leaves the dealership.
The company’s software and connected services business keeps around 70 cents of every one dollar it earns. By comparison, vehicle sales typically generate profit margins of just 4-10 cents on every dollar, highlighting why the automaker is investing so heavily in digital services.
GM suggested that its subscription business could eventually generate more revenue than vehicle sales. The company estimates that each connected-services subscriber generates roughly $20 in monthly revenue.
