Automotive companies and startups alike are investing big in “hands off the wheel” self-driving technology but consumers are hesitant to pay much for it, a new study finds.
AlixPartners’ 2019 Global Autonomous Vehicle Report surveyed more than 6,500 consumers in China, France, Germany, Italy, the U.K. and the U.S. about their likelihood to pay for Level 3 and 4 autonomous vehicle features. Level 3 and 4 features are beyond technologies like lane assist and automatic braking--where the driver must still be engaged in things like steering and accelerating. These higher-level features can fully take over driving under certain conditions.
Respondents in the U.S. would pay a 9% premium, on average, or $1,868 per new car, for higher level autonomy. In Germany, the premium amount was the highest—at 24%--but the German respondents were also the most apprehensive about safety in autonomous vehicles.
Respondents, however, were more willing to spend on autonomous ride-hailing services and surrender personal ownership of a car—even if the ride-hailing cost up to 20% more per month than owning a car.
More than 60 traditional automotive companies are investing heavily in autonomy, according to Mark Wakefield, lead author on the study, with an anticipated $75 billion in investment between 2019 and 2023.
“While many companies are working to deliver an AV to market, companies evaluating automation simply as an add-on feature risk acting shortsightedly—consumers are less eager for an evolutionary approach than some companies are hoping for,” Wakefield commented in a press release about the study.
Consumers continue to be concerned about the safety of autonomous vehicles, with only 27% of Americans confident in the vehicles’ ability to navigate from one place to another safely, according to the survey. In 2018, a similar study by Cox Automotive found that 16% of drivers were comfortable with autonomous technology, so perhaps perception is slowly shifting.
“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 undertested solutions in consumers' hands,” Wakefield stated.