GM quietly pivots to subscription revenue with OnStar and Super Cruise growth
General Motors is increasingly focusing on software and subscription services as a high-margin revenue stream, highlighted by strong growth in OnStar and Super Cruise. OnStar generated approximately $800 million in Q2 2024, up over 20% year-over-year, with GM expecting to add 1 million subscribers this year. Super Cruise, GM's hands-free driving system, saw revenue rise 70% and is on track to exceed 850,000 subscribers by year-end. Retention after the free three-year trial is 30-40%. GM's software business retains roughly 70 cents per dollar, far exceeding typical auto margins. The push comes as EVs reduce traditional maintenance revenue. Competitors like Ford, Tesla, Mercedes-Benz, and BMW are also expanding subscription offerings. Wall Street reacted positively, with GM stock rising 8.8% after the earnings call.
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