For today’s major automakers, focusing solely on vehicle manufacturing is far from sufficient; some automakers are even operating at a loss if they only calculate hardware revenue. This has prompted more automakers to shift from a “sell a car and it’s done” model to “full lifecycle service,” prioritizing supply chain integration, auto finance, after-sales service, peripheral services, basic charging infrastructure, and digital subscription services.
Analysts estimate that if automakers earn about 10% net profit from producing a car, their gross profit margin could exceed 70% through connectivity features and driver assistance technologies. This is why the automotive industry is paying close attention to smart cars (SDVs).
On April 29 local time, Ford Motor Company released its financial report for the first quarter of 2026, showing total revenue of $43.3 billion (approximately RMB 296.41 billion at the current exchange rate), a year-on-year increase of 6.4%; net profit of $2.5 billion; and adjusted EBIT of $3.5 billion, far exceeding market expectations.
During the earnings call, General Motors CEO Mary Barra discussed in detail the benefits of its digital subscription service, OnStar. She noted that in addition to the U.S. and Canadian markets, these new “persistent, recurring digital revenue streams” now cover 20 other markets, including China, Mexico, Brazil, South Korea, and the Middle East.
She also emphasized that General Motors is steadily moving toward its goal of adding more than 1 million OnStar subscribers by 2026, with about 30% of existing customers currently opting for the premium plan.
General Motors CFO Paul Jacobsen described OnStar as a “growing and undervalued asset,” which contributed $750 million (approximately RMB 5.134 billion) in profit in the first quarter, representing a year-over-year increase of over 20%. For the full year, GM expects its digital subscription service revenue to reach $3.1 billion (approximately RMB 21.221 billion), a year-over-year increase of 15%. Jacobsen stated, “We expect to reach 13 million subscribers by the end of 2026, an increase of 1 million year-over-year, with an average revenue per subscriber (ARPU) of approximately $20.”
OnStar’s business includes Super Cruise driver assistance technology, which debuted in 2018. Jacobson revealed that nearly 40% of customers renewed their subscriptions after the three-year trial period, and the company expects to have over 850,000 subscribers by the end of this year. Jacobson is very optimistic about this.
In addition, General Motors plans to launch the new “SDV 2.0” platform on the all-electric Cadillac Escalade iQ by 2028, aiming to get closer to “hands-free and eyes-free” autonomous driving capabilities.
In response to analyst questions, Jacobson predicted that these revenues would continue to grow with the release of SDV 2.0. He believes that while GM’s average revenue per vehicle may currently be lower than Tesla’s, GM’s sales volume is significantly higher, as are its deferred and realized revenues, “which is the real scale effect across the entire product portfolio.” He called digital services “a very impactful part of the business of the future.”
Despite widespread market concerns about “subscription fatigue”—with surveys showing that about half of U.S. adults canceled a subscription in the past 12 months due to price increases—General Motors data suggests its customers are not so averse to paying monthly for vehicle features. Barra described the digital services business as “non-cyclical” and said the company is advancing autonomous driving technology in a way that differentiates GM from other companies.
For the 35 million vehicles currently on the road that have not yet subscribed, Jacobson acknowledges that many older models lack the hardware infrastructure required to run Super Cruise, but his goal is to reduce costs and make the technology accessible to the lower-end market.
