Maybe an argument can be made that the contract is deceptive, or so long and detailed that it amounts to a DoS on the potential buyer. I think those are important topics that deserve a lot more scrutiny and weight in the courtroom than they get. But that's a different topic.
What you say is correct - the laws as they stand do allow for this behavior by BMW, and the company is correct when they say that (buyers? renters?) don't own the gadget in question.
It's also true that a discussion around preventing this sort of behavior with new laws is probably warranted.
Laissez-faire capitalism's answer is "None at all", which is appealingly simple and works well whenever the parties involved have similar levels of bargaining power. But in practice a huge number of negotiations occur between parties with vastly different levels of bargaining power -- and in that case, having few or no restrictions can lead to emergent behaviour (especially positive feedback of wealth and poverty over time) that many feel to be unfair.
It's difficult because the alternative -- adding restrictions -- seems almost impossible to do without "playing favourites", which leads to claims of unfairness that are hard to argue against because they are so plain: They're right there in writing. It's harder for many people to see how the absence of restrictions is also a kind of "playing favourites".
Obviously, that's completely insane and I'm sure anyone can see this. Why treat cars differently?
This additional cost however is less than just adding the higher trim to every configuration, e.g. the additional room, so it doesn't make economic sense to do so.
But let's assume you now get the ability to sell and unlock a higher trim after the initial purchase. Let's say that 20% of your customers would be willing to purchase such an unlock at a later point in time, resulting in increased revenue.
If that revenue plus the reduced lifecycle expense exceeds the cost of adding the higher trim as baseline you would have a business case, which wouldn't be the case if you just add the room for everybody (where you'd have to raise the base price and lose buyers on the lower end).
I think I'm not alone in saying that yes it SHOULD override what it says in the contract. You can write whatever you like in contracts, but that does not make it reasonable behavior.
More generally, what restrictions should the law place on contracts, in your opinion? That is, can you describe a general rule that would rule out BMW's heated car seats from being a valid contact clause (but, presumably, not rule out every possible contract)?
You can't charge a subscription for something someone already physically owns.
That ought to stop this sort of nonsense while still allowing most all SaaS stuff to keep going. Heck you could still charge a service contract for the seat heaters. You just can't go "No we won't enable this thing that's already fully wired up and ready to go and fully owned by you"
Though honestly the "correct" way to fix this sort of nonsense is to rework or possibly repeal DMCA entirely. It's absurd a manufacturer can put a lock on my stuff and have it be illegal for me to remove the lock.
How is it possible that they can get away with it without any lawsuits? I'd want to be compensated for carrying other people's crap around town.
If a feature requires constant development (like self-driving) then it makes more sense. But even that has been subverted these days with SaaS companies that charge a subscription but only offer new features as upgrades so your version doesn't really improve that much unless you pony up.
How much more $ do these people really need?
Well, you could read the contract, see that clause, and choose not to buy that particular car, couldn't you?
It's likely that there are other cars available to buy that don't have clauses like that in their contracts. But even if there aren't (either because this car manufacturer has a monopoly on cars where you live, or there's a cartel operating in which all car manufacturers secretly agree to adopt this type of clause): Do you feel you have a right to buy a car without a clause like that in the contract?
If your answer to that is "Yes, I have that right": Suppose for the sake of argument that this car company is a monopoly. What happens if it goes out of business, or decides to stop making cars altogether? Should they be prevented from doing so by law, in order that your right to buy such a car remains undisturbed?
If you live on a remote island, do you likewise have a right to buy a car with no such clause in the contract?
I'm interested in understanding what rights you feel people should be entitled to when it comes by buying things, and how you would have the government deal with the downstream implications of legally guaranteeing those rights.