Selling subscriptions earns 70 cents per dollar, while selling cars only earns 4 cents! General Motors' new money-making machine: OnStar rakes in $800 million in a single quarter

According to a report by Business Insider, General Motors is quietly transforming from a traditional car manufacturer into a subscription service company, with its software and services business proving far more profitable than selling cars.

GM stated that for every dollar of revenue generated by its software and services business, it retains approximately 70 cents. In contrast, profit margins on car sales are typically extremely low, with manufacturers often retaining only 4 to 10 cents for every dollar of revenue earned.

A gross margin as high as 70% means the subscription business has become a veritable "money-printing machine" for GM.

OnStar is its biggest cash cow. This connected services platform, once primarily used as an emergency assistance button, has now grown into a sizable business, generating approximately $800 million in revenue in the second quarter alone, with its customer base steadily increasing.

GM expects OnStar subscribers to approach 13 million by the end of 2026.

Super Cruise is the growth engine. GM's autonomous driving assistance system, Super Cruise, costs $39.99 per month, and many car owners choose to continue paying for the subscription after the free trial period ends.

Data shows that Super Cruise revenue increased by approximately 70% year-over-year, with about 70,000 new users in the second quarter. The company expects subscriptions to exceed 850,000 by the end of 2026.

On an overall scale, GM's subscription business had deferred revenue of $5.4 billion in 2025, and the company expects to achieve $3.1 billion in actual revenue and $7.5 billion in deferred revenue in 2026.

CEO Mary Barra told investors during an earnings call: "We believe the company has strong growth levers, and they are multi-faceted growth levers." She emphasized that GM sees significant opportunities to improve profitability and reduce reliance on the industry's traditional boom-and-bust cycles.

This strategy is not unique to GM. Tesla has shifted its full self-driving service to a subscription model, Ford charges periodic fees for BlueCruise, and Mercedes-Benz, Audi, and BMW are also experimenting with software-based upgrade solutions.