Report: Consumers Willing to Pay $3,500 More for Semi-autonomous Cars - $4,900 for Full
【Summary】Interestingly, the report also highlights that individuals who are familiar with self-driving technology and its potential are ready to fork out up to $10,000 more to acquire the modern vehicles.
Following the pricing trends of new technologies, self-driving cars are predicted to initially roll out with hefty price tags. Compared to non-autonomous vehicles, the units will be equipped with robust sensors and algorithmic-powered platforms for accurate guidance on public roads, which all cost serious money to develop and deploy.
Considering that a new car costs roughly $32,000 (average) on the market today, how much are consumers willing to fork out on top of that price point for an autonomous car?
Paying for Autonomy
A report authored by Richardo Daziano of Cornell, Mauricio Sarrias of Universidad Catolica del Norte in Chile, and Benjamin Leard of Resources for the Future answers this question. The study, published in the journal of Transportation Research Part C: Emerging Technologies, suggests that US-based residents are willing to pay an additional $3,500 for partial autonomy and up to $4,900 for full autonomy.
Interestingly, the report also highlights that individuals who are familiar with self-driving technology and its potential are ready to fork out up to $10,000 more to acquire the modern vehicles. On the other end of the spectrum, survey participants who don't know much about autonomous cars are more hesitant to pay extra money for the units.
"Consumer acceptance is critical to forecast adoption rates, especially if one considers that there may be strong barriers to entry (potential high costs, concerns that technology may fail)," said the authors of the report in the study.
Hypothetical vs Reality
It is important to consider that the report's choices were based on hypothetical variables. The actual price that consumers may end up spending may change when they are in the process of buying a car.
The additional price of $4,900 also seems quite low for a car that is capable of driving itself without human assistance. David Tracy from Jalopnik, pointed out that the additional cost is comparable to an upgrade of a RAM 2500 to a Cummins Diesel.
The reality is, autonomous features are currently rolling out in increments – not in major upgrades. This could make price points easier to swallow for consumers. For example, all new models (2017 and up) of Toyota and Lexus vehicles come with ADAS features (automatic emergency braking). The businesses aren't selling the cars at higher price points. Instead, they're increasing the value of their products with semi-autonomous features. Previously, Toyota forced customers to pay $300 for automatic braking and lane departure warning features, as part of the Safety Sense C platform.
By comparison, Honda offers automatic emergency breaking technology as part of its Honda Sensing System for an additional $1,000.
If other automakers follow this trend, a fully autonomous car may not be that expensive and may eventually become the standard, once regulations are in place that phases out traditional, human-powered vehicles.
"To plan for and analyze the large impacts of automation, policymakers and car manufacturers need to understand the market. Our study is an initial attempt to quantify how households currently perceive and economically value automated vehicle technologies," said Daziano in a statement.
Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.
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