Revolution in the Driver’s Seat: The Road to Autonomous Vehicles

Revolution in the Driver’s Seat: The Road to Autonomous Vehicles

          
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Revolution in the Driver’s Seat: The Road to Autonomous Vehicles

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  • How We Performed Our Study—and What It Reveals

    Our study of the future market for AVs models the most likely paths to autonomous-driving capabilities, as influenced by key enabling technologies, cost dynamics, and consumer demand. We reviewed the technologies required, their availability, and the future evolution of their cost based on likely improvements and scale, and conducted in-depth interviews with experts at OEMs and suppliers, as well as researchers.

    To ensure that our projections took a holistic economic perspective, we then combined the forecasts for cost evolution with an extensive BCG survey of more than 1,500 U.S. consumers who had recently bought a car or intended to buy one soon. Prior to conducting the survey, researchers tested respondents’ understanding of AVs and described various autonomous features. Most consumers quickly and intuitively grasped the meaning and implication of autonomous features without needing to actually operate an AV.

    Survey questions probed how and why consumers would use AVs and how much they would pay for AV features. We assessed consumer perception of AVs along several dimensions, categorizing responses by parameters such as gender, age, geography, current car ownership, and attitudes toward car sharing. The survey yielded deep insights into how much consumers within those categories would be willing to pay for AV features.

    Finally, we reviewed many factors—including the development of new regulations and insurance pricing models—that could have an impact on consumer adoption rates and then teased out their implications for key stakeholders.

    Consumers Want Autonomous Features—and Are Ready to Pay Extra for Them

    The survey results make clear that drivers in the United States are enthusiastic about the potential of AVs. About 55 percent of respondents said that they would consider buying a partially self-driving car, and some 44 percent said that they would consider buying a fully autonomous vehicle. (See Exhibit 1.) The level of consumer interest in AVs is higher and more intense than it was for electric vehicles (EVs) prior to their introduction and suggests that AV adoption may be more rapid and widespread than the currently slow pace of EV adoption.

    exhibit

    Some consumers do have concerns about AVs, however. Given the responses of survey participants who said that they would not buy an AV, the biggest considerations appear to be reliability, cybersecurity, and uncertainty about AV interactions with other vehicles on the road.

    No Clear Consumer Preference for Specific Features

    Despite their general enthusiasm, respondents expressed no clear preference for specific features, with about two-thirds describing themselves as very interested or somewhat interested in each of several autonomous capabilities. (See Exhibit 2.) Roughly equal percentages of respondents expressed interest in capabilities such as automated searching for parking spots and autonomous valet parking, as well as self-driving on highways, in heavy traffic, or along a fixed route. And in a striking finding, 51 percent of respondents said that they are very interested or somewhat interested in buying a vehicle that has the full array of autonomous capabilities.

    exhibit

    Most interested consumers are also willing to pay extra for autonomous features. More than 50 percent of respondents said that they would be willing to pay extra for each feature individually and for all features together in a fully autonomous vehicle. More dramatically, 24 percent of surveyed consumers said that they would be willing to pay more than $4,000 extra for an autonomous feature, while 17 percent said they would pay more than $5,000 for a fully autonomous car. The lack of a clear preference for a specific feature, however, presents OEMs with a challenge: which feature or features should they prioritize in their research and development?

    Premium Vehicles Will Lead the Way

    The respondents in our survey who are owners of premium nameplates showed the highest level of interest in—as well as the greatest willingness to pay for—both partially and fully autonomous vehicles. Thus we expect AVs to make their first appearance in the premium segment of the auto market. But consumers in the volume segment also showed significant interest in AVs, with nearly half likely to consider buying a partially autonomous vehicle and 36 percent likely to consider purchasing a fully autonomous vehicle. Given the intense interest across both premium and volume segments, we believe that OEMs with a solid position in both markets—such as Volkswagen, Toyota, and GM—could gain valuable scale by transferring AV technology from their premium nameplates to their volume nameplates as it becomes profitable to do so.

    Insurance Costs, Safety, and Productivity

    The survey results demonstrate that consumers clearly perceive how AVs could make driving markedly safer and exert downward pressure on their insurance, repair, and maintenance costs. Respondents who said that they’d buy a partially autonomous vehicle in the next five years or so cited lower insurance premiums, increased safety, and hands-free highway driving as the leading reasons for doing so. (See Exhibit 3.) Those who said that they’d buy a fully autonomous vehicle in roughly the next ten years cited lower insurance premiums and increased safety as well. (See Exhibit 4.)

    exhibit
    exhibit

    The survey results also suggest that AVs could usher in a second revolution in personal productivity, perhaps one that generates even greater gains than those made possible by home appliances such as washing machines and dishwashers. More than half of respondents who said that they’d buy a fully autonomous vehicle mentioned increased productivity as one of their top reasons for purchase. This seems to suggest that many, if not most, consumers would be willing at times to give up the pleasure of driving for some other activity.