REPORT: Are You Ready to Pay More for a Self-Driving Car?

IN BRIEF

Self-driving cars are expected to be the next big thing in personal transport. However, a new report suggests that people may not be willing to pay too much for the potentially life-saving technology.

SAFETY AT ANY PRICE?

The auto industry must grapple with a difficult double standard: although consumers agree safety-related technology is the most important feature in cars, people don’t want to pay more for it.

The findings are based on a Deloitte survey of 22,000 consumers in 17 different countries. The report found that US consumers have a growing interest in advanced safety technology, such as adaptive cruise control and anti-lock braking, but don’t want to spend a lot on it.

US consumers are willing to pay $925 on average for advanced safety features, a 30% decline since Deloitte’s last survey on the topic in 2014.

“Perhaps more concerning, a significant share of American consumers suggest that the auto industry should bear the entire cost for bringing these advanced technologies to market, saying they are unwilling to pay any more for these features — even those designed to improve safety,” the report reads.

That’s a difficult pill for the auto industry to swallow as it invests billions in self-driving-car tech. Volvo plans to sell “deathproof” cars directly to consumers in 2020, and Tesla is about to enter the mass market space with the roll out of its Model 3.

All Tesla cars will be equipped with the costly hardware to support self-driving capabilities, but Model 3 owners may be less willing to pay the extra $5,000 to download the autonomous driving software compared to Model S and Model X luxury buyers.

RIDE-HAILING OVER OWNERSHIP

Still, many automakers are preparing for the reality that consumers may be unwilling to pay for the extra costs associated with the technology.

Ford and Uber plan to introduce self-driving cars as part of a ride-hailing fleet. Google’s Waymo is reportedly also exploring a robot taxi service for its self-driving minivans.

But as the Deloitte report notes, ride-hailing services aren’t as popular in suburban areas that require more constant access to a vehicle to get around.

“For this reason, it is unlikely that ride-hailing services will have a significant impact on overall vehicle demand in the near term, at least outside core urban centers,” according to the Deloitte report.

That raises questions as to how the auto industry will scale its self-driving tech in areas where personal car ownership still prevails. It remains to be seen whether autonomous taxi services, which don’t require the cost of a driver, will be enough to offset the price of sophisticated self-driving sensors that can cost several thousands.

Still, some automakers have managed to introduce more advanced autonomous features without asking consumers to break the bank. Honda Sensing — which offers offers lane departure warning, lane keep assist, adaptive cruise control, and more — only costs an additional $1,000.