Consumers Waver on New Auto Technologies

After seven years of strong light-duty auto sales, early 2017 data suggests that numbers are softening, which could impact new technologies coming to market.

June 01, 2017

DENVER – Last week at the Fuels Institute’s Annual Conference, Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers, shared how the growth of new automobile technologies could come up against several barriers, including consumers.

Bainwol outlined the state of the U.S. automobile industry, citing that after seven years of light-duty vehicle growth (2010-2016), early 2017 data suggests that the market is shifting. In terms of contributing issues to the automobile industry overall, consumers believe that cars and trucks are contributing less pollution than a decade ago, and they believe gas prices will remain about the same as they are today over the next decade. Consumers also believe that climate change is a threat, but terrorism and a weak economic climate are greater concerns.

As the auto industry advances in the coming years, particularly with a new administration and new leadership at federal agencies that directly impact environmental and manufacturing regulations, Bainwol explained that there are four broad market forces driving auto policies: autonomous technology, vehicle-sharing, electrification and connectivity. Additionally, there are also three broad political forces: nationalism versus globalism; carbon primacy to something that is unknown; and innovation outpacing regulations.

Consumers, meanwhile, seem to be a mixed bag when it comes to new vehicles, new vehicle technologies, regulations and overall safety.

If the country and auto fleets are to move toward more fuel-efficient vehicles, Bainwol shared that powertrain aspirations are moving in the wrong direction: From May 2012-2017, the gap between consumers who said their next vehicle would by a hybrid compared to a gasoline-powered vehicle increased from 37% to 52%. While there is higher awareness of EVs and hybrids, lower gas prices and greater fuel economy standards are lowering consumer interest in moving away from conventional gas-powered engines.

Consumers also like the idea of EVs, but they don’t want to pay a higher price tag for the vehicles. With reliability being the greatest characteristic consumers are looking for in a new vehicle, range anxiety with EVs is a barrier to adoption. However, if electric cars were to cost the same as cars with traditional gas-powered engines, and could travel 250 miles per charge, then consumers seem to be willing to purchase an EV over a gas-powered car.               

For auto safety, Bainwol said that factors such as human error, older vehicles and older drivers have contributed to the sharpest two-year climb in motor vehicle fatalities in 53 years (2014-2016). In fact, most consumers believe that reducing driver distraction is the most important step toward reducing the number of fatalities on the road. This represents an interesting disconnect in the role of autonomous vehicle technology, where human error is taken out of the equation.

Bainwol explained that automation is not a new concept, having first showed up in Popular Science magazine in 1952. In fact, the technology itself is not the problem, he said, but rather the special moments when the vehicle is in operation that are unpredictable. The public is also not quite there when it comes to autonomous vehicles, largely because there is a lack of understanding that the technology is safer compared to human drivers.

But, consumers will have plenty of time to get behind the idea of autonomous technology. Citing a Moody’s report, Bainwol shared that self-driving vehicles won’t become ubiquitous until at least 2055. After all, the transition to anti-lock brakes took about 30 years.

The Fuels Institute’s Annual Meeting took place May 23-25 in Denver, with more than 100 fuel and automotive industry stakeholders focusing on influential market trends that will impact consumers and the current and future transportation market. For more information about the Fuels Institute and its research initiatives, go to fuelsinstitute.org.

Advertisement
Advertisement
Advertisement