Every modern car rolls off the line with dozens of sensors, wireless modems and apps that treat daily travel as a rich stream of commercial data. In 2023 the Privacy Not Included project at Mozilla Foundation concluded that all 25 major brands it examined failed its minimum safeguards, calling cars “the worst product category” for privacy.

That verdict landed just as automakers were turning more once-standard features into recurring charges. BMW’s global reversal of its heated-seat paywall underscored a broader shift from one-time sales to metered software. Together, those trends are forcing regulators, investors and drivers to reassess what it means to own a vehicle in 2025.

Key Takeaways

  • All 25 brands in Mozilla’s 2023 audit failed basic privacy tests; 84 percent say they can share or sell driver data.
  • The FTC barred General Motors from sharing certain precise driver-location data with consumer-reporting agencies for five years after a 2025 settlement.
  • BMW dropped its heated-seat fee, yet software-based subscriptions such as Mercedes-Benz’s power boost persist.
  • New York’s 2025 bill would ban charges for hardware already installed, reflecting wider U.S. pushback.
  • Europe’s 2023 Data Act and a record 12.8-year U.S. fleet age coincide with rising scrutiny of connected-car business models.

From Sensors to Servers: How Cars Became Data Engines


Automotive data logs now rival those of smartphones. Mozilla’s audit found that 84 percent of brands say they may sell or share personal data collected in vehicles, including location trails, driving behavior or voice snippets. Some brands reserve rights to infer sensitive attributes such as sexual activity or health information from usage patterns, a contractual scope rarely seen in other consumer electronics.

The volume extends well beyond telematics. An investigation by Associated Press showed many models copy contacts and call logs from paired phones. Mozilla’s review of automakers’ policies, cited in that coverage, noted that 19 brands say they can sell drivers’ personal data and that about half say they may share information with government or law enforcement when asked, even if no court order is mentioned—leaving motorists little practical opt-out path.

Privacy advocates argue that core safety functions—remote unlock, crash alerts and over-the-air fixes—depend on always-on connectivity, making true consent illusory. As cabins morph into rolling smartphones, the data flow has shifted bargaining power from owners to manufacturers and their analytics partners.

European policy is already reacting. The 2023 Data Act obliges makers of connected products to let users access and port data those devices generate; its rules will apply to data from connected vehicles placed on the EU market after 12 September 2025, according to the Council of the European Union. Automakers that pipe telemetry into exclusive clouds must either re-engineer data paths or risk fines in their second-largest export region.

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Insurance, Law Enforcement and the Value of a Trip Log


Driving data has become a commodity for insurers that prize real-time risk scores. After U.S. regulators learned that General Motors sent detailed driving data, including precise location information, to consumer-reporting agencies, the Federal Trade Commission imposed a five-year ban on sharing such sensitive location and behavior data with those agencies in a January 2025 settlement, noted by Reuters.

A separate 2024 lawsuit filed by Texas accuses GM of harvesting telemetry such as speeding, hard braking, sharp cornering and seat-belt use from more than 14 million vehicles and selling it to insurers that adjusted premiums, again without clear driver consent, according to Reuters. That case could clarify whether state privacy law treats car telemetry more like credit reports or retail loyalty cards.

Law-enforcement access is similarly fluid. Automakers in the AP survey said they may respond to police data requests where their terms of service define the company—not the driver—as the data owner. Civil-liberties groups warn that convenience features such as remote starter apps are quietly erecting a parallel tracking system layered on top of traditional license-plate and cellphone records.

When the Sticker Price Hides a Paywall


BMW’s 2023 heated-seat backlash exposed cultural limits on hardware paywalls. “The user acceptance isn’t that high,” said board member Pieter Nota, confirming the cancellation in remarks quoted by Motor1.

Manufacturers have since pivoted to software locks they frame as ongoing services. Mercedes-Benz charges about 1,200 dollars per year for its Acceleration Increase option, delivering a noticeable performance bump in certain electric models through a code update, according to Ars Technica. No mechanical change occurs, underscoring the pure margin potential.

General Motors packages its Super Cruise driver-assistance suite free for three years, then bills 25 dollars a month. Executives told Reuters the feature could yield about two billion dollars in annual software revenue within five years, a projection that assumes broad consumer tolerance for monthly car fees.

Surveys suggest that tolerance is thin. A Cox Automotive study found that roughly seven in ten U.S. shoppers would consider switching brands if core vehicle functions required monthly payments, while Deloitte’s 2024 Global Automotive Consumer Study estimated that only about a quarter of U.S. consumers are willing to pay for connected-vehicle subscriptions.

Policy Makers Draw Lines Around Built-In Hardware


Lawmakers are testing whether post-sale fees violate basic consumer-goods norms. New York’s Assembly Bill A01095, introduced in 2025, would bar automakers and dealers from charging subscription or post-purchase fees for features that rely on hardware already installed at delivery, with examples such as heated seats and certain driver-assist sensors spelled out in the bill text published by the New York State Assembly.

Industry groups counter that cloud overhead and liability updates justify service fees, especially when features rely on live maps or AI models. Yet the New York proposal signals that states may not wait for federal rules before policing so-called “features on demand.”

Federal agencies are focusing on data rather than price. The FTC’s GM case shows a willingness to ban monetization outright when consent is unclear. That precedent raises compliance stakes for any brand that couples subscription enforcement with granular telemetry.

A fragmented U.S. map seems likely. States such as Massachusetts and California already require broader access to diagnostics data in the name of right-to-repair, and several other legislatures are drafting bills to block hardware paywalls or to open telematics to independent shops. Automakers now face a regulatory quilt that complicates nationwide product planning.

Export Markets Demand Clean Data Governance


Europe’s Data Act is only one piece of a tightening regime. Under the 2018 General Data Protection Regulation, precise location trails and in-vehicle identifiers are treated as personal data, which means manufacturers must secure explicit, revocable consent before repurposing them for marketing or resale. Subscription models that depend on constant profiling must fit within that framework.

Japanese and U.S. brands that dominate American roads rely heavily on European revenue. Consulting firms warn that forced over-the-air opt-ins may face class-action exposure in Germany and France, where consumer federations can sue on behalf of drivers. Compliance costs could erode the very margins subscriptions promise.

Some challengers are seizing the moment. Mozilla notes that only a small minority of brands—among them Renault and Dacia—offer drivers meaningful options to delete collected data, and Dacia’s budget positioning has allowed it to advertise simpler dashboards and fewer add-on fees than many rivals.

Cross-border data transfer is a further hazard. EU regulators have already pressured foreign tech firms to localize certain categories of user data, and privacy advocates expect similar demands for connected-vehicle telemetry. Western automakers that route logs to cloud regions outside the bloc may face ultimatums to keep European driver data within EU borders, adding infrastructure cost to every connected model.

Aging Fleet, Uneasy Owners and the Used-Car Puzzle


American motorists are already delaying upgrades. S&P Global Mobility reports the average vehicle age reached 12.8 years in 2025, the highest on record, as high prices and financing costs kept many buyers out of showrooms. Privacy advocates argue that distrust of data-heavy dashboards and subscription locks is becoming another reason some owners keep older cars longer.

Subscription locks complicate depreciation. A second-hand buyer may discover that adaptive cruise control or heated steering wheels remain dormant unless a credit card is attached, reducing real utility. Dealers struggle to price features that exist physically but not functionally.

Independent repair networks face similar uncertainty. The EU Data Act will give owners the right to have in-vehicle data shared with third-party service providers they choose, yet no comparable U.S. federal rule exists. As a result, an out-of-warranty driver in Ohio could be steered back to a franchised dealer simply to replace a battery sensor protected by encryption.

Collectively, those frictions push some households toward simpler vehicles or niche brands with lighter connectivity, eroding the upgrade cycle that has underpinned Detroit and Stuttgart profit models for decades.

Margin Dreams Versus Legal Exposure for Investors


Recurring software revenue carries enviable margins—often above 70 percent—but also concentrated risk. GM’s Super Cruise forecast impressed analysts, yet the same company is under dual scrutiny from the FTC and Texas courts for data use. A single adverse ruling could wipe out years of subscription gains.

Equity analysts now model three broad scenarios. In the first, consent-driven data policies and modest service fees coexist with mild regulation. In the second, aggressive state or EU action forces privacy-by-design revamps, trimming recurring revenue. The third assumes consumer defection to low-tech models, shrinking the total addressable market for connected features.

Capital allocation is already shifting. Automakers that once funneled billions into proprietary infotainment are weighing more open software stacks to reduce accusations of lock-in. Suppliers that build domain controllers must guarantee over-the-air audit trails, adding cost but offering compliance insurance.

Rating agencies say the next credit-watch triggers may be non-financial: a state attorney general subpoena over location sharing or a class-action notice about undisclosed paywalls could affect bond spreads as quickly as a unit-sales miss.

What Defines Ownership When Code Runs the Cabin?


Automakers once sold mechanical products designed for decades of private control. Software has fractured that premise, leaving drivers to question whether they possess a durable asset or a licensed bundle of apps. Regulators, meanwhile, are learning that privacy and commerce collide at 70 miles per hour.

The coming years will test whether established brands can prove that connected features benefit owners more than balance sheets. Those that treat drivers as partners in data stewardship, not merely as recurring revenue, may retain trust on crowded roads—and in parliaments drafting the next wave of rules.

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