12
Dec

Autonomy, Delayed: Four Reasons Why Millennials May Not Be Ready For Self-Driving Cars

An Autonomous Future Series: For automobile manufacturers, suppliers, and technology companies, a bold new future has arrived. Technology that adds autonomous features to the driving experience are now available on vehicles by all major manufacturers – inching us ever closer to the day where the driver is a passive, rather than active, participant in the driving experience. To take a closer look at what’s to come, automotive research experts from Market Strategies-Morpace will share their insights in an occasional blog series titled “An Autonomous Future.” In this blog, Dania Rich-Spencer and Stephan Schroeder, Automotive Vice Presidents at Market Strategies-Morpace, share insights about why a consumer panel of millennials do not trust self-driving vehicles and, therefore, would not step foot inside one.

By: Dania Rich-Spencer & Stephan Schroeder – Vice Presidents, Automotive Growth & Innovation

 

To say that autonomous vehicle technology is top of mind for auto manufacturers is a slight understatement.

Across the globe, carmakers are doubling and tripling down on features that will take the power of the driving experience out of the often-unpredictable hands of the car owner, and into the relative algorithmic safety of computer-driven vehicular tech. According to a Brookings Institute study, manufacturers spent more than $80 billion on engineering AV technologies for their cars in 2017. In fact, a majority of this year’s models have incorporated one or more autonomous features — things like lane departure warnings, automated braking, and radar-enabled cruise control.

Framed against this reality, it would be easy to expect that a hands-off future is all but assured. In fact, at the recent ADAS & Autonomous Vehicle USA Conference, engineers spent two days talking about continued refinements that will assure the public’s safety. During one session, in fact, engineers discussed with pride spending considerable resources to understand how many times a pedestrian looks before entering a crosswalk.

So it was surprising — indeed, shocking — to observe these same engineers shift in their seats during a consumer panel discussion facilitated by Suzanne Miller of Morpace on Day 2. During the discussion, five millennials — without hesitating — answered “No” to the most fundamental of questions: “Would you step foot inside an autonomous vehicle?

Though the response was for some a harsh reminder of the consumer challenges that still have to be solved, the question of trust is not a new one — in fact, a poll released earlier this year by the American Automobile Association found that 73 percent of those surveyed are “too afraid” to enter a self-driving car. This is up 10 percentage points from the year prior, and underscores the biggest hurdle facing AV and ADAS tech — one that cannot simply be funded or engineered away.

As we listened to the panelists — varying in background, gender, nationality, and age — we were able to pinpoint:

The four most pervasive reasons why
there is skepticism and fear of self-driving vehicles

Trust and Safety

Topping the list is the overall belief that humans remain best suited to command the driving experience. They readily cite the isolated instances of accidents involving self-driving cars among the top reasons. In other transportation experiences where much of the process is automated – flying aboard a modern commercial jetliner, for instance – there always is a human who will reassuredly step in, they say, if something goes wrong.

The amount of engineering that underlies the self-driving experience, in itself, should be reassuring to the public. In fact, one audience member, in a fit of frustration, asked rhetorically why these people would “rather trust an Uber driver than a well-engineered AV?” Interestingly, panelists cited the number of high ratings and successfully completed journeys on an Uber driver’s profile as affirmation that they know what they’re doing. Something that is not readily available for autonomous vehicles today but may be required to convince consumers of its safety in the future.

It was compelling to hear this from a group that has developed a “learned trust” – a sort of symbiotic relationship – with existing driving tech. This is a public that would not commute beyond their neighborhood without some form of a moving map (trusting its computer-intoned directions implicitly as they are uttered from the dash or smartphone).  But it’s a group that has also learned how flawed technology can be – how imperfect it is at times. They have coped with taking their new $1,000 iPhone out of the box, only to find it doesn’t work. They deal with daily, inexplicable disruptions of their WiFi service. Because of these experiences, they have learned what the limits are to technology. As a result, they have developed a skepticism – and in some cases even fear – that only seems to grow with every new announcement about self-driving vehicles. This underscores the growing need to build consumer trust with the new technology as autonomous vehicles are continually developed.

 

Privacy

Millennials have had a love-hate relationship with the technology that guides their lives. On the one hand, dramatic improvements in tech have given this group more powerful tools and connectedness than ever; on the other, the personal information input into these devices and sites has been under assault. The specter that AV technology will further abridge someone’s privacy appears to be a deal breaker for those who would rather cruise in relative anonymity.

 

Hackers and Bad Actors

All the engineering in the world, said these panelists, cannot correct for the mental deficiencies of those who wish to illegally subvert the technology, or use it for harm. Fears include hacking of cars to disable features, or to use them for nefarious purposes; or some unstable driver inside an AV who uses it to wreak havoc on an unsuspecting public.

 

Liability

Panelists expressed grave concerns about who would ultimately be held responsible for accidents involving AV tech. If I was not steering the car when it hit that pedestrian, why should I be held responsible for the damage inflicted? Sorting out the chain of liability – whether the mobility provider should offer some sort of supplemental insurance for its self-driving technology, or whether the public, through the act of purchasing or renting the car, should remain the liable party – was a clear precondition of their risk/reward decision about this new technology.

 

Given what we learned from a group of smart, articulate millennials, AV manufacturers will need to deliberately guide consumers down the path to a world of autonomous vehicles – on consumers’ terms. Challenges associated with this include: 1) understanding exactly what these terms are, and 2) responding in an empathic manner to meet consumers’ expectations. Conquering these challenges may well represent the Holy Grail between reticence and broad adoption.

At Market StrategiesMorpace, we are working with vehicle manufacturers and technology companies to better understand the human factors that will ultimately lead to a future of new, safe, and widely accepted modes of transportation. If we can be of service, please contact us.

Dania Rich-Spencer & Stephan Schroeder – Vice Presidents, Automotive Growth & Innovation

 

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2
Mar

The Challenge of Selling Electric Vehicles

By Bryan Krulikowski, Senior Vice President

While automotive manufacturers continue to push forward with electrified plug-in vehicles in the United States, an important question begs to be answered: Who is going to buy them?

According to Morpace’s 2016 Powertrain Acceptance and Consumer EngagementTM (PACETM) study, more than one-third of current gasoline-powered vehicle owners plan to purchase an alternative fuel vehicle. While this shows high upside potential for EVs and Plug-In EVs, further analysis shows that consumers may not be completely comfortable making this leap from gasoline quite yet. In some sense, electrified vehicles are outside of most consumers’ comfort zone.

Keep It Simple, Stupid

Looking at data from the PACE study and leveraging our powertrain experience, we see that consumers prefer technologies that follow the GEMO principle—Good Enough, Move On—and prefer the least change to their lifestyles as possible. Technologies that offer both of these attributes include Hybrid EVs, turbocharged gasoline-powered vehicles, and the conventional internal-combustion engine. Automotive manufacturers have made significant strides in improving the fuel economy of gasoline-powered vehicles and, for a significant number of consumers, the fuel-savings realized by these technologies—and the lower incremental price charged for them over electrified powertrains—provides a “good enough” level of performance and efficiency. Further, neither of these technologies requires consumers to install re-charging equipment at their home, be at the mercy of infrastructure limitations when looking to re-charge away from home, or worry about other issues related to range anxiety. If you run low on gasoline, one can almost always find a refueling station nearby; for electrified vehicles, ease of finding re-charging stations is still the exception not the rule.

Not Motivated to Change

Further, the lack of a major market event is curtailing interest in electrified vehicles among mainstream vehicle buyers. Specifically, fuel prices in the U.S. are not driving consumers to consider electrified vehicles at an accelerated rate. In fact, the lower prices we have enjoyed in the U.S. have resulted in the opposite effect.

According to the PACE study, today’s national gasoline prices are below the price consumers have indicated is low enough for them to consider a less fuel-efficient, larger vehicle. This is one explanation for the market shift we are seeing away from sedans to SUV/CUVs and Trucks. In fact, gasoline prices would have to reach $5.20/gallon for the average consumer to consider a more fuel-efficient vehicle than what they have now—nearly $3.00/gallon more than today’s average.

But… There is Hope!

While the above commentary suggests a less-than-pretty future for electrified technologies, this certainly does not have to be the case. Perhaps the most important finding from the PACE study is that virtually all current owners of PHEVs or EVs will remain an electrified vehicle owner in the future. Once consumers move away from gasoline-powered vehicles, they are extremely unlikely to go back to them. However, a daunting challenge is ahead of automotive manufacturers as they need to not only offer electrified vehicles in the right package and at the right price, but they also need to rely on a dependable and comprehensive infrastructure to support these vehicles on a mass-market level.

It will certainly be exciting to see how electrification strategies play-out in the coming years.

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14
Sep

For Most Americans, Being “Mobile” Still Requires a Personal Vehicle

For Americans, Being "Moble" Still Requires a Personal VehicleBy: Bryan Krulikowski, Senior Vice President

How do you get from point A to point B? Given that 4-in-10 consumers believe their primary mode of transportation will be different five years from now than today, the answer to this is going to become increasingly complex.

The goal of the Morpace MOVETM Study that was recently fielded and is now available as a syndicated study is to help answer this question. We surveyed more than 3,000 consumers across eight U.S. metropolitan markets and uncovered some interesting consumer insights about the role of transportation and mobility in this new “Sharing Economy.”

Consider:

  • Overall, more than two-thirds of respondents would have their ability to get around strongly impacted by not owning their own personal vehicle.
  • Although ride-sharing services are currently being used at a greater rate than car-sharing services, they are reserved for “occasional” use and not relied on as every day transportation.
  • Despite lower levels of vehicle ownership, Urbanites have a stronger emotional attachment to their vehicle than Suburbanites—even going so far as to give their vehicle a name.
  • Finally, fewer than one-third of respondents feel that alternative mobility solutions are practical for them. After all, consumers do not see any other option as convenient as owning a primary vehicle in the U.S.

This shouldn’t come as a major surprise. For decades, vehicles have represented freedom for many Americans. The national highway system has made it feasible to get from state to state, where driving long distances for work or play is more common than in other parts of the world.

Among the many findings in this study is the idea that the majority of consumers clearly feel that having their own vehicle is necessary. They may not use it every day, as other results from the Morpace MOVETM Study show us, but when they need their vehicle, THEY WANT IT.

The study also gives us ideas for how and when personal vehicles are used compared to other forms of transportation. Public transit, particularly in urban areas, does (and will continue to) play a role, perhaps based most on convenience and cost. One-half of respondents have access to public transportation within one mile of their residence. Still, public transportation comprises just part of the mobility puzzle for Americans today.

Morpace MOVETM found that eBike, shared bikes, and car-sharing modes show the greatest potential increase in spend in the next one to three years. But there are times that Americans want to get where they want, when they need to get there. So even for those living in some of the country’s most densely populated communities, nearly all respondents use their own vehicle at least a couple times per month. And three-quarters of current vehicle owners are planning to buy or lease a new vehicle in the next five years.

We may now be part of the “alternative mobility” movement in the U.S. Yet, the value and importance of a personal vehicle remains high for Americans because of that sense of freedom it provides – no matter where you live in this country.

Other findings and insights are available through our Morpace MOVETM Study and you can learn more by clicking here.

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