10th of July 2020
With the growing interest in inventing autonomous vehicles (AVs), human interference may no longer be needed for driving. Essentially, an autonomous vehicle is an innovative technology designed for cars to be driven independently of the driver. Soon, we may all be able to simply program our destination in our cars, sit back and enjoy the ride.
As self-driving vehicles are becoming a reality, major automakers and tech companies are investing big in the “hands off the wheel” technology. According to Mark Wakefield, the lead author of the 2019 Global Autonomous report by AlixPartners, more than 60 traditional automotive companies are daring to invest heavily in autonomy with expected investments of $75 billion between the years 2019 and 2023.
However, the AV technology is receiving mixed reactions from the consuming public, who is reluctant towards self-driving vehicles for varying reasons. This then raises the question: are self-driving vehicles worth the huge investments? As studies show, taking the risk of moving self-driving cars forward may present more of a marketing challenge. Drivers will probably need a lot more convincing than expected. As a result, companies working on delivering AV advanced technology to the market need to be aware of consumer skepticism as several studies prove that people are less eager to jump on the AV bandwagon.
In this context, a Deloitte survey shows that half of U.S. drivers are skeptical about AVs for safety reasons. Deloitte’s survey included a sample of 35,000 driving consumers from 20 different countries. The results detailed that 48 percent of U.S. respondents believe that fully autonomous cars will be unsafe. Additionally, 68 percent of the same respondents shared their concern about possibly driving alongside heavy autonomous trucks while 56 percent were apprehensive about riding in a shared driverless taxi or similar vehicles. Besides, more than half of US and Indian respondents expressed their concern about testing AVs on public roads where they live.
“AV manufacturers will have to do more than develop a good product. They will need to invest in consumer experiential marketing, work with regulators to show consumers that the infrastructure is ready for a safe introduction, and as a group, not scare off the public by having major incidents due to unsafe and under-tested solutions in consumers’ hands,” stated Wakefield in his AlixPartners report. Other respondents surveyed by Deloitte were apprehensive about the associated costs that come with AV tech; approximately, 58 percent of respondents expressed their unwillingness to pay more than $500 for the AV technology in a new car. In another similar recent study conducted by Ipsos, surveying 20,000 new car buyers from 10 different countries, consumers continue to be concerned about the safety of autonomous vehicles. The study shows that only 6 percent of them if given the choice, would opt for an AV.
In its 2019 report, AlixPartners also surveyed more than 6,500 consumers in China, France, Germany, Italy, the UK, and the US about their willingness to pay for Level 3 and 4 AV features, which are higher-level technologies that offer lane assist and automatic braking where the driver must still be engaged in things like steering and accelerating. The results showed that attitudes about AVs vary across geographies. Respondents in the U.S. would likely pay an average of 9 percent premium or $1,868 per new car, for higher-level autonomy. The highest premium recorded of 24 percent was in Germany; however, the German respondents were also the most worried about the safety aspect of self-driving vehicles.
Furthermore, the “no human intervention” aspect of the new technology also poses a problem for some consumers. A study by the Institution of Mechanical Engineers (ICM) on this subject emerged from the UK, where a majority of 66 percent of respondents said they would be uncomfortable to travel in a driverless vehicle while 51 percent believe that humans are better drivers than car computers. The same study also revealed that 60 percent of the 2,000 adults surveyed expressed their preference for driving on their own rather than being driven by an AV.
Deloitte analysts advise automakers and electronics providers to take into consideration these public perception studies. They further insisted that it is crucial to use these statistics as guidelines for marketing AVs and for planning their future production. “Stakeholders across the auto industry are currently facing challenges when it comes to business models and product portfolios as they are forced to rethink long term investments while not getting left behind,” said Joe Vitale, global auto sector leader for Deloitte Consulting to “FierceElectronics” about the issue of consumer reactions to AVs. “Underlying these massive investments is the assumption that consumers will pay for advanced vehicle technologies when they appear on the market,” he added. “However, as consumer skepticism gains momentum, automakers should rationalize returns on invested capital to remain profitable as consumers’ desires to purchase new technologies continue to wane.”
Self-driving cars will certainly cause drastic changes in the auto industry with great possible gains but also probable losses. This would be highly dependent on marketing, the major player in this business. So right now, unless they want AVs to be a losing investment, it is of paramount importance for enterprising companies to work on the best ways to relieve potential consumers from their worries.
