GM's OnStar and Super Cruise subscriptions keep roughly 70 cents of every dollar in revenue, dwarfing the 4-10% margins on the vehicle itself. The company is explicitly betting on this recurring revenue to smooth out its historically cyclical business.
As vehicle profits normalize industry-wide, GM says software and subscriptions are becoming a genuine growth engine, recurring, high-margin revenue that keeps customers connected long after delivery.
📊 The Numbers
GM's software business keeps ~70 cents of every revenue dollar, versus 4-10% typical vehicle margins
OnStar generated $800 million in Q2 revenue alone
GM expects nearly 13 million OnStar subscribers by year-end
Super Cruise revenue up 70%, with 850,000+ subscribers expected this year
30-40% of eligible owners keep paying after their three-year free trial ends
We do think we have tremendous levers, multiple layers of growth. We definitely think there's a lot of opportunity at GM to grow, improve margins, and become less cyclical.
Want the full conversation?
🎙️ Listen to today's Automotive State of the Union episode for the complete discussion, additional context, and the conversations that shaped our perspective.
70 Cents on the Dollar Is a Number Worth Sitting With
That margin dwarfs anything available on the vehicle sale itself, and it explains exactly why GM is leaning this hard into subscriptions. For comparison, our hosts pulled real current pricing while discussing this live: Super Cruise runs $40/month, Ford's BlueCruise costs $50/month, and Tesla's Full Self-Driving runs $99/month (or a one-time purchase option). Three different price points, three different bets on how much a driver will pay monthly for software layered on top of a car they already own.
Who Owns the Customer Relationship After the Sale?
Here's the more important strategic question underneath the revenue numbers: as OEMs build direct, high-margin subscription relationships with owners, who actually owns that ongoing conversation, the manufacturer or the dealer?
Kyle's point on the show: dealers need to figure out their own version of the recurring-revenue game, particularly around maintenance intervals and app-based communication, because whoever keeps the customer's attention between purchases has real leverage over what happens at the next visit, and the next sale.
What This Means for Your Store
Worth an honest look at whether your dealership has its own recurring-touchpoint strategy, service reminders, app engagement, ongoing communication, that keeps you part of the customer relationship the OEM is now building directly and profitably. If GM owns that channel and you don't, you're competing for attention you used to have by default.
