General Motors has spent years pitching itself as a technology company that happens to build cars. The pitch just got a lot more convincing.
In its latest earnings report, the Detroit automaker detailed how its connected services business pulled in substantial cash last quarter. OnStar alone generated roughly $800 million. That figure marked more than 20 percent growth from the same period a year earlier. Business Insider first highlighted the numbers that show GM adding about one million OnStar subscribers in 2026. The total should approach 13 million by year end.
Super Cruise tells an even stronger story. The hands-free driving system added around 70,000 paying users during the second quarter. GM now projects more than 850,000 subscribers by December. Revenue from the service jumped 70 percent year over year. And retention looks sticky. Between 30 and 40 percent of drivers who finish their initial three-year trial choose to keep paying.
These aren’t side businesses anymore. They sit at the center of a deliberate strategy to generate high-margin income long after the vehicle leaves the dealership. Software and services now deliver margins near 70 percent. Traditional auto sales? They hover between four and 10 cents on the dollar. The difference explains why Wall Street sent GM shares up nearly nine percent after the results.
But the transformation didn’t happen overnight. Back in 2020 the connected-services operation produced $1.7 billion in realized revenue. By 2025 that had climbed to $2.7 billion in realized revenue alongside $5.4 billion in deferred revenue. For 2026 GM forecasts $3.1 billion realized and $7.5 billion deferred. GM Authority laid out those gains in March. The trajectory looks nearly exponential from here.
GM Chief Financial Officer Paul Jacobson spelled it out clearly at an investor conference. “When you start to look at the ability to collect revenue and to continue to collect revenue years after the original wholesale, you can see where the revenue model actually starts to fundamentally transform.” He added that the software-like margins in the connected business “can actually drive, and potentially over time, dwarf even the wholesale business, which is remarkably strong and remarkably large.”
CEO Mary Barra struck a similar note on the earnings call. “We do think we have tremendous levers, multiple levers of growth. We definitely think there’s a lot of opportunity at GM to grow, improve margins, and become less cyclical.” The company itself put it plainly in prepared remarks. Software and services are becoming increasingly important to how customers experience GM vehicles and how the company delivers value beyond the initial purchase.
As vehicles turn more software-defined, GM can roll out new features through over-the-air updates instead of hardware refreshes. That shift mirrors what Apple achieved under Tim Cook. Recurring revenue streams stabilize earnings and reduce dependence on the boom-and-bust cycle of new-vehicle sales. Tesla, Ford, Mercedes and BMW have all moved in the same direction. Tesla even dropped its one-time $8,000 Full Self-Driving purchase option in favor of a $99 monthly subscription.
GM’s approach carries its own wrinkles. Starting with 2025 model-year vehicles the company bundles eight years of basic OnStar connectivity and three years of Super Cruise into the sticker price on equipped models. The tactic gets customers hooked during the free period. It also raises the effective transaction price while creating a built-in renewal pipeline. Current pricing shows OnStar One plans starting at $34.99 per month. Super Cruise runs $39.99 monthly or $399 for the year. Bundled top-tier plans can reach nearly $65 monthly.
Those prices have drawn criticism. Some owners complain about feeling nickel-and-dimed for features their vehicles already contain. Others worry about data collection and the difficulty of disabling the connected modem without breaking other systems. Yet the renewal rates suggest many drivers see enough value to keep writing checks. Roughly one-third of OnStar subscribers upgrade to paid tiers beyond the basic package.
The bet carries risks. Economic downturns could prompt customers to cancel nonessential subscriptions first. Regulatory changes around data privacy or autonomous-driving approvals might slow Super Cruise adoption. And the heavy investment in connected technology must still deliver returns that justify the capital spent. GM once poured billions into Cruise, its robotaxi unit, before scaling back those ambitions.
Still, analysts sound optimistic. Morningstar’s David Whiston told Business Insider that the results match the software story GM first outlined in 2021. “If they can do other software as a fee, plus data to local governments on traffic and accident risk, there’s real potential for revenue streams at margins impossible to reach via just selling a car.”
Recent coverage reinforces the momentum. Yahoo Finance noted on July 22 that GM generated $2 billion in software and subscription sales over the past nine months while banking commitments for about $5 billion more in future subscriptions. The article framed the shift as GM following Apple’s playbook. Automotive News had already declared in March that the subscription wager was paying off with software-like margins.
Look closer at the numbers and the picture sharpens. Super Cruise now comes standard on higher trims of the Chevrolet Silverado and GMC Sierra. Those trucks alone could push the subscriber base well beyond current projections. Each renewal represents pure profit after the initial hardware cost. And every over-the-air update that adds value creates an opportunity to charge more or extend the relationship.
GM isn’t alone in chasing this model. But its scale, its early bundling strategy, and its focus on both safety connectivity and advanced driver assistance give it distinct advantages. The company has avoided the full self-driving hype that Tesla embraced. Instead it markets Super Cruise as a proven hands-free system on more than 600,000 miles of compatible roads. That practical positioning appears to resonate with truck buyers and luxury customers alike.
Of course execution will decide the outcome. GM must keep churn low. It must deliver updates that feel worth the monthly fee. And it must avoid the perception that basic vehicle functions now require a subscription. The line between convenience and nickel-and-diming can blur quickly.
Yet the financial logic looks hard to ignore. One-time vehicle sales tie revenue to economic cycles and production schedules. Subscriptions create predictable, high-margin cash flows that compound over years. Jacobson sees that potential clearly. So does Barra. Their comments suggest the strategy has moved from experiment to core operating principle.
Industry watchers will track renewal rates most closely in coming quarters. If the 30-to-40-percent Super Cruise figure holds or improves, GM’s transformation will accelerate. Deferred revenue will turn into realized income at an expanding clip. Margins will expand. Cyclicality will ease. The automaker that once measured success by how many trucks it sold could soon boast about how many digital relationships it maintains.
The shift won’t replace vehicle sales. GM still needs to move metal. But the subscription layer adds a powerful new engine to its profit machine. And that engine is just starting to rev.
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