In spring of 2021, I worked with a Voyager Consulting team to provide pricing recommendations to Volvo Cars. We studied on-demand car features (ODCFs), premium features that could be built into the car and activated post-market. The subscription pricing model is a new revenue stream for car manufacturers and is already adopted by Audi, BMW, Cadillac, Porsche, and Tesla. Our project involved scoping out leading ODCFs, assessing consumer price sensitivity, and implementing a break-even model.
We then built a pricing model in R Shiny with the ability to consider economies of scale. With two price points for inputs, the model extrapolates further savings from scale with a linear model. The result was a flexible, easy-to-use application available online.