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New Profit Pools for OEMs: Strengthening core Services through lifecycle control

Munich, November 2025
F

or years, automotive OEMs have looked to new (digital) profit pools—subscriptions, in-car services, and data monetization— beyond the traditional vehicle sales as the next frontier of growth.

Yet reality has consistently underdelivered. Uptake remains limited, consumer willingness to pay is low, and the expected revenue streams have not materialized on scale, yet also based on free disrupting solutions such as Android Auto or Apple CarPlay. The lesson is clear: the industry must recalibrate its growth expectations and focus on the proven—but underleveraged—profit pools that lie in aftersales, financial services, and vehicle lifecycle control.

“Most experiments have failed or remained marginal, especially in the U.S. as a conservative market – car buyers still want things like XM satellite radio.”

- CEO USA, Premium OEM

Lifecycle control: Why Multi-Cycle models  outperform

The core insight is simple: owning the vehicle beyond the first sale generates up to 1.5x more profit per unit than the traditional one-time transaction model. Multi-cycle vehicle allocation (e.g., Vehicle-as-a-Service (VAAS)) allows OEMs to keep cars in their portfolio longer, extend their revenue opportunities across multiple owners, and continuously re-engage customers through recurring contracts.

By retaining assets in their portfolio, OEMs and Captives can expand their customer base while generating up to 1.5x more profit per vehicle​

Vehicle Lifecycle Timeline 8 Years

Source: AlixPartners / Berylls by AlixPartners 

Each cycle—be it a subscription, a used car lease, or a second-life credit program—adds incremental margin from aftersales, finance, and services. While individual VAAS contracts may be less profitable than a new sale, the aggregated profit across three or more cycles surpasses traditional models significantly. In one case example, a single vehicle generated over €6,000 of cumulative profit across three lifecycle stages, compared to less than €4,200 in a one-off new car sale.

“Loyalty programs are the most powerful driver of incremental revenue and customer retention –ensuring clients stay within the brand ecosystem even after a change of vehicle ownership.”

- CSO, Volume OEM

The benefits extend beyond direct financial gain only. Retaining control of vehicles creates recurring customer touchpoints, lowering acquisition costs and strengthening brand loyalty. Research shows that keeping existing customers loyal is 5–10 times less costly than acquiring new ones. Multi-cycle models also create natural upsell opportunities: a driver who leases a used EV today may be primed for a new model subscription tomorrow.

The indirect benefits compound over time. Satisfied customers generate word-of-mouth recommendations, lower churn, and reduce the need for costly marketing campaigns. They also prove less price-sensitive, enabling more dynamic pricing with fewer discounts. For OEMs, this translates into higher returns on marketing spend, more efficient customer service, and stronger employee engagement.

Financing innovation as the enabler

Financial services sit at the heart of lifecycle control. Leasing, credit, insurance, and bundled service contracts not only generate stable profit streams but also tie customers into the OEM ecosystem. For BEVs, financing innovation is particularly critical:

  • Used EV leasing with battery health guarantees reassures customers about residual values.
  • Flexible financing models allow customers to adapt contracts to changing needs.
  • Bundled offers, including charging services or extended warranties, de-risk ownership and reinforce customer trust.

Such offerings directly address some of the biggest barriers to BEV adoption — price, residual uncertainty, and maintenance anxiety—while keeping OEMs connected to vehicles across successive owners.

Aftersales: Reinventing the backbone

Aftersales remains the backbone of OEM profitability, often accounting for around half of industry profits. However, the transition to EVs threatens this foundation, as BEVs require fewer traditional service interventions. OEMs must respond by redefining aftersales: predictive maintenance, software upgrades, battery diagnostics, and connected services can replace declining mechanical revenue streams.

By embedding these services into financing contracts or subscription packages, OEMs can transform aftersales into a future-proof, digitally enabled profit pool.

Owning the lifecycle, securing the future

The message is clear: the future of automotive profitability lies less in speculative new revenue pools and more in mastering the full lifecycle value of each vehicle. OEMs that retain ownership and customer connection across multiple usage cycles can protect margins, stabilize BEV adoption, and build resilience in an increasingly competitive market.

The winners will be those who treat vehicles not as one-off transactions but as recurring platforms for value creation—from first registration to reuse and recycling. By shifting to multi-cycle models, OEMs can unlock stronger profits, deeper customer loyalty, and a sustainable path to long-term growth.

Authors

Christopher Ley

Partner

Paul Kummer

Partner

Florian Tauschek

Associate Partner

Tobias Detzler

Associate Partner

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