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The Autonomous Vehicle: The Car of the Future

Fully autonomous and partially autonomous vehicles have the potential to be a disruptive technology in the years to come.

Fully autonomous vehicles can drive themselves in virtually all situations without driver intervention. Some limitations, such as use in severe weather, are still to be defined, along with protocols for challenging conditions. Partially autonomous vehicles operate with a high degree of autonomy in select situations, such as driving on highways and changing lanes, but they require user input in all other situations.

The first partially autonomous vehicles will hit the roads in 2016. The benefits to society will be remarkable: significantly reduced road accidents and fatalities, and much better fuel economy. For the driver, autonomous features will make commuting easier and free up time in the car for other productive tasks or leisure.

Here are some of the most important trends:

The Autonomous Vehicle Is (Almost) Here

  • The road to autonomous vehicles starts now. The first partially autonomous vehicles come on the market in 2015 or 2016, and fully autonomous vehicles are expected to be launched as early as 2025.
  • Consumer demand is very high; 55% of US drivers are likely to consider buying a partially autonomous vehicle, and 44% a fully autonomous one.
  • As many as 24% of consumers are willing to pay an extra $4,000 or more for autonomous driving features, with high interest in self-driving on a highway, self-driving in traffic, self-driving along a single route, and autonomous valet parking.
  • The main reasons for purchasing an autonomous vehicle: lower insurance premiums and fuel costs, along with improved safety.
  • Consumer preferences, technology maturity, regulation, and mitigation of important risks such as vehicle reliability and cybersecurity will be critical in driving the adoption of autonomous vehicles.

Autonomous Vehicle Adoption Will Start in Premium Segments

  • Partially autonomous features are likely to start at or above $4,000 per feature, while fully autonomous vehicles should hit the road in 2025 at around a $10,000 increase over sticker price.
  • This suggests a gradual adoption of the technology, initially in the premium segment.
  • Based on market economics, there is an expected 12-13% global penetration of partially and fully autonomous features by 2025, representing an estimated $42 billion market.
  • Several factors—such as down-selection of other features for autonomous vehicles, government regulation, and wide-scale adoption of big city mobility vehicles such as self-driving taxis—may further accelerate adoption of autonomous vehicles.

Autonomous Vehicles Will Change the Rules of the Road

  • With full autonomy, shared cars in megacities such as New York and Paris will be more economical than car ownership —and will have potential to reduce traffic significantly.
  • OEMs will have to carefully segment the market and adapt to choices consumers will make between autonomy and other vehicle features.
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