Consumers are warming up to the concept of fully self-driving vehicles, but some roadblocks may lay ahead for automakers, according to Deloitte's "2018 Deloitte Global Automotive Consumer Study."
Consumers have a brighter outlook on the safety of autonomous vehicles, though concerns remain. Significantly fewer people in the 2018 study feel that autonomous cars will not be safe, with less than half (47%) of U.S. consumers holding this view—a dramatic decrease from 2017, when 74% felt autonomous vehicles would not be safe.
This view is consistent with other countries covered in the study, including: South Korea (54% this year vs. 81% last year), Germany (45% vs. 72%), and France (37% vs. 65%) who feel driverless cars may not be safe. The most notable change comes from China, where the percentage of people who think autonomous cars will not be safe dropped from 62% in 2017 to only 26% in this year's study.
"Overall acceptance of autonomous technology has grown rapidly in just a short time," said Craig Giffi, Vice Chairman, Deloitte LLP, and U.S automotive leader. "However, driverless cars are still in an experimental stage, and the industry is at the front-end of a long capital investment cycle required to bring autonomous vehicle technology to the mainstream market. To complicate that cycle, automakers recognize an immediate need to invest in areas including electrified powertrains, advanced light-weight materials, connectivity and mobility services. While the returns will be farther out, it's important that automakers continue allocating resources to autonomous driving technology. Those who settle for a reactive mindset rather than preparing for the long term will be at greater risk as consumer acceptance for autonomous technology further accelerates."
Many people agree they would trust autonomous vehicles with a proven track record for safety. Almost three-quarters (71%) of U.S. respondents said they would be more likely to ride in an autonomous vehicle if they had an established safety record, up just slightly from 68% in the 2017 study. Other markets appear to be accelerating, however, with 83% of South Korean consumers (up from 70% in 2017), and 63% of German consumers (up from 47% in 2017) holding the same view.
Taking that a step farther, more consumers are turning to trusted brands for reassurance around the safety of autonomous technologies. Nearly two-thirds of U.S. consumers (63%) report they would be more likely to ride in an autonomous vehicle if it was from a brand they trust, compared to 54% in 2017. Consumers' faith in brands appears to strengthen with younger consumers, as 70% of the Gen Y/Z population reported they would be more likely to accept a self-driving vehicle from a trusted brand, compared to 62% of Gen X and 56% of Boomer/Pre-Boomer consumers. "The auto industry battle between brands for consumers' trust is on in a new and heightened way," said Giffi.
In most regions, consumers favor traditional car manufacturers to bring fully autonomous vehicles to market. In the U.S., nearly half of consumers (47%) would put their trust in a traditional car manufacturer, compared to roughly one-quarter each that would trust a technology company (25%) or a new-to-market autonomous vehicle maker (28%). Consumers across Asia hold widely different views: In Japan, 76% trust a traditional car manufacturer to bring the technology to market, compared with 28% in China and 13% of consumers in Southeast Asia.
Not completely trusting the industry, many consumers would put their trust in federal regulation. More than half of U.S. consumers (54%) reported they would feel better about riding in self-driving cars if governments would implement standards and regulations.
While consumers appear more apt to embrace emerging technology in the form of autonomous vehicles, many are brushing off newer powertrain options in favor of traditional engines. Most U.S. consumers (80%) still favor either a gasoline or diesel engine, up slightly from 76% in 2017, and only 15% said they would choose a hybrid engine in their next vehicle.
International consumers show a growing preference for alternative powertrains. More than one-third (38%) of Japanese consumers and 36% of Italian consumers would prefer a hybrid engine in their next vehicle, and 40% of Chinese consumers hold the same view.
"The economics of electric vehicles compared to traditional powertrains are presently not favorable enough for either consumers or automotive companies," said Joe Vitale, Global Automotive Leader, Deloitte Touche Tohmatsu Limited. "However, two significant trends could move us closer to the tipping point: battery cost reduction and government regulation. The trend toward mandating electrified powertrains — not merely demanding increased fuel efficiency or better carbon footprints, especially in Europe and China — lays out a 'must-do' path for global car makers. Also, as automakers simultaneously begin to broadly partner on building out the electric charging infrastructure and developing other value-added services that increase the convenience factor for consumers, electric vehicles can become a desirable alternative for most consumers."
Deloitte's research also finds that consumers are not willing to pay much more for autonomous vehicles. Deloitte's most recent consumer survey data on the topic found that in countries such as Germany (50%), the U.S. (38%) and Japan (31%) consumers were unwilling to pay extra money for these vehicles. The findings were similar for electric vehicles, where 42% of German consumers and just over one-third of people in Japan and the U.S. said they are unwilling to cover additional costs to get alternative powertrain technology.
Giffi notes, however: "As exciting as autonomous-vehicle technology looks to be, and despite the current higher interest and acceptance of autonomous technology versus electric vehicles in consumers' minds, government regulations look to be forcing the investment in electrified vehicle technology. At the same time, consumers around the world are consistent in saying they do not want to pay anything extra for either electrified or autonomous vehicles, leaving automakers with some difficult capital allocation and business model decisions if they expect to make any money at all."
Deloitte's study suggests that auto manufacturers developing and bringing advanced vehicle technology to market, such as autonomous vehicles, should simultaneously create new business models that can sustain an appropriate return on investment. Finally, given the more than 1 billion conventional vehicles on roads around the world today, and the tens of millions that continue to be sold on an annual basis which are all expected to last well over a decade, the transformation to greater adoption of autonomous driving and electric powertrains will take quite some time to reach a tipping point. Automakers must balance ongoing innovation and new business models with the need to sell, service and delight today's consumers with improved technology they are most willing to pay for in the near term, such as safety.