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Apple vs. Tesla: The Battle over Premium Connectivity and In-App Purchase

Tesla owners have long enjoyed the benefits of the Premium Connectivity package, accessible through the Tesla app on iPhones. This subscription unlocks an array of exclusive features, including in-car navigation with live traffic data, music and video streaming capabilities, and more.

While Tesla has managed to bypass Apple’s In-App Purchase system for this subscription so far, a recent report from Gizmodo raises questions about whether the automaker should comply with Apple’s guidelines and integrate the native billing option. This move could have significant implications for Tesla’s revenue and Apple’s App Store policies.

Tesla’s Premium Connectivity subscription serves as a gateway to a host of impressive features for Tesla owners. By subscribing for a monthly fee of $9.99, users gain access to in-car navigation with real-time traffic updates, enabling them to navigate seamlessly on the road. Additionally, the subscription provides an avenue for music and video streaming right from the comfort of their Tesla vehicles. These amenities, although exclusive to the in-car display, currently exempt Tesla from utilizing App Store billing.

A noteworthy addition to Tesla’s Premium Connectivity package is the “View Live Camera” feature. Enabled when the vehicle is parked and Sentry Mode is active, this functionality allows Tesla owners to monitor a live feed from their car’s cameras. According to Gizmodo’s report, this particular feature may fall within Apple’s guidelines requiring an app to offer a native In-App Purchase billing option.

Apple’s App Store guidelines explicitly address scenarios involving hardware-specific content. The “Hardware-Specific Content” policy states that app features working in conjunction with an approved physical product may unlock additional functionality without implementing in-app purchases, as long as the in-app purchase option is also made available.

This stipulation seemingly provides Tesla with the freedom to employ its billing system for the Premium Connectivity subscription, as long as the Apple In-App Purchase billing option coexists within the Tesla app.

At present, the Tesla app exclusively utilizes its billing system for the Premium Connectivity subscription, effectively bypassing Apple’s App Store fees. Apple’s fees typically start at 15% for developers earning less than $1 million annually and increase to 30% for higher-earning developers.

Elon Musk, CEO of Tesla, has been an outspoken critic of Apple’s App Store guidelines in the past, likening the “secret” App Store fee to a burdensome “30% tax on the Internet.” Musk has also expressed support for Epic Games in their ongoing legal dispute with Apple over App Store rules.

Despite Tesla’s current non-compliance with the In-App Purchase system, it seems that the company has managed to escape Apple’s scrutiny thus far. However, with this matter now gaining attention in the headlines, it remains to be seen whether Apple will take action.

It is essential to note that all apps submitted to the App Store undergo a rigorous review process, which Tesla’s app has seemingly circumvented until now. The potential repercussions of this situation may not only impact Tesla’s revenue but also prompt a reevaluation of Apple’s App Store policies.

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Tesla’s Premium Connectivity subscription offers a wealth of exclusive features to iPhone users via the Tesla app. By deviating from Apple’s In-App Purchase system, Tesla has sidestepped the associated fees.

However, a recent report highlights the possibility of Tesla running afoul of Apple’s guidelines, potentially leading to a shift in the company’s billing strategy. As Tesla’s billing practices make headlines, the future of their app’s compliance with Apple’s guidelines remains uncertain. The outcome of this situation could not only impact Tesla but also influence Apple’s approach to App Store regulations.

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