Driving interest

Editor's note: Tim Grainey is founder and managing member of Strategic Research Initiatives. Renah Wolzinger is a professor at Golden West College.  

Two important trends within the automotive industry – the growth of electric vehicles (EVs) and the development of autonomous vehicles (AVs) – are spurring extraordinary changes in technological advances, manufacturing practices and even dealership selling and servicing approaches. In this article we examine how market researchers need to adapt their research perspectives to provide salient and cogent information to EV and AV manufacturers, their suppliers and stakeholders in the coming years.

Electric vehicles

Electric vehicle production and technological advances are now a top priority of manufacturers and suppliers throughout the automotive industry, reacting to growing concerns about climate and other environmental changes. However, EVs are currently a niche market in the U.S., with new EV sales at 2% of total new vehicle sales in 2020. That share is expected to rise to 7% of the market (6 million vehicles in 2025) and 18%-20% market share (19 million cars) in 2030. Tesla currently accounts for the vast majority of those sales. Consulting Firm LMC Automotive projects that battery-electric sales could hit 4 million vehicles in 2030 or 25% of the market.¹ IHS Market projects 25%-30% of U.S. new vehicle sales will be battery-electric or zero-emission by 2030 and 45-50% by 2035.²

California Governor Gavin Newsom’s executive order in late 2020 that new vehicle sales with gasoline engines will be banned in the state from 2035 has added to the urgency for the transition to EVs within the industry. California alone is expected to have 4 million EVs by 2030.³

In April 2021, President Joe Biden proposed a $174 billion investment into the electric vehicle market as part of his $2 trillion infrastructure plan to help America recover from the pandemic. The American Jobs Plan includes building out EV-charging infrastructure with a national network of 500,000 EV chargers by 2030 (five times the current 100,000 chargers) plus rebates and tax incentives to buy American-made EVs and electrifying transit buses, school buses and the United States Postal Service’s vehicles (over 225,000 in 2019). According to CBS News, “The plan would allow automakers to spur domestic supply chains, retool factories to compete globally and support American workers to make batteries and electric vehicles.”⁴

Globally, China and the European Union are driving the rapid expansion of EV sales for new vehicles and combined are predicted to account for 72% of the global electric car market by 2030.⁵ China also will ban new vehicle sales with internal combustion engines (ICEs) in 2035 while the U.K., Ireland and the Netherlands plan to ban gasoline and diesel new car sales by 2030. Norway has utilized government tax breaks to drive electric vehicle costs below ICEs; as a result, the market share of battery-powered cars increased to 54% in 2020 in the Nordic country, compared with less than 5% in most European nations.⁶ Global powertrain forecasts of electrified vehicles sales by Boston Consulting Group estimate that: “EVs will capture a third of the market by 2025 and 51% by 2030.”⁷

How marketing research can help electric vehicle manufacturers

Market researchers need to focus on consumer adoption of EVs over the next few years, including: 

• Multi-country comparison tracking studies to pinpoint effective strategies in other countries that have driven more rapid EV adoption than in the U.S., as well as consumer satisfaction with EVs and changes in driving behaviors with EVs compared with ICEs.
• For domestic researchers, comparison of recent EV buyers with those who considered an EV but did not acquire one should focus on their reasons for purchase/consideration, driving habits, purchase price details, vehicle segment (e.g. SUVs, luxury sedans), key demographics and other important measures. For EV buyers, assessing their average miles on a charge, battery charging times, usage/availability of public chargers, overall convenience of EV ownership, differences in driving an EV from a gasoline-engine vehicle as well as problem ratings, which have been higher on initial quality data with Tesla owners. The diary method for first-time EV buyers who also own an ICE vehicle could be edifying, particularly in cost comparisons for fueling/charging, servicing, etc.
• Tracking general reactions to future innovations, such as vehicle connectivity, online sales and mobile servicing, can provide guidance on general consumer acceptance for manufacturers in their development efforts prior to qualitative interviews and clinic tests. Specific focus on production, sales, marketing and customer experience from non-legacy automotive manufacturers (i.e., Rivian, Lucid Motors) would be of value.
• Message testing of concepts for dissemination of clear information to offset key concerns about EV ownership, such as reduction in battery costs, availability of government incentives, miles on a charge, charger availability and the risks of fires at charging ports (particularly in homes) due to reports of the massive amount of water firefighters require to put out fires on EV vehicle batteries.⁸ Qualitative interviews followed by tracking studies would help manufacturers, dealerships and their advertising agencies adjust their messaging, particularly with the push to sharply increase EV sales in the next decade.

Autonomous vehicles

AV sales for consumers were expected to be on the market in a limited way by 2020/2021 but are not available yet for consumer purchases. Other than testing robo-taxis in some cities, AVs are still some years away for consumers (despite claims from some Tesla owners that they are available now). A January 2020 report by the Victoria (B.C., Canada) Transport Policy Institute predicts widespread, affordable cars that drive themselves will not be available until the 2030s or even 2040s.⁹ The technology will continue to move ahead, with at least one element (and frequently more) of advanced-driver assistance systems (ADAS) being available in virtually all new vehicles currently on the market. In addition, the consumer acceptance of these ADAS features (i.e., backup camera, lane assist, automated parking) is very high. The huge expected main benefit of self-driving cars is reduced accidents. According to a recent study, almost 585,000 lives could be saved between 2035 and 2050 by introducing driverless vehicles on the roads; however, as per the National League of Cities’ research, merely 6% of the largest cities in the U.S. include the potential effects of driverless technology into their transportation plans.¹⁰

The primary area of emphasis currently for AV applications is on the heavy-duty truck side and for commercial vehicles in closed or “behind the fence” environments (i.e., ports, bus yards), where AVs are being tested and utilized. An article in Automotive News/Shift Mobility Report said, “Beyond improving driver comfort, diminishing fatigue and striving for safety benchmarks, truck operators can make significant fuel-efficiency improvements with an automated system in active control. The coronavirus has brought renewed appreciation to trucking’s role in underpinning essential-goods delivery, with 72.5 percent of all freight transported in the U.S. hauled by the trucking industry, according to the American Trucking Associations.”¹¹ A fuel savings of 5 to 10 percent is huge within the trucking industry.

TuSimple, a Chinese autonomous heavy duty truck company with its headquarters in San Diego, recently reduced by more than 40% the travel time of a 951-mile test run of agriculture products from Nogales, Ariz., to Oklahoma City in May 2021. The run usually takes at least 24 hours but the autonomous vehicle took only 14 hours and six minutes. A human driver worked on the pickup and delivery of the produce but the vehicle drove itself through the long interstate portion from Tucson to Dallas, with a human safety driver on board in order to comply with various federal and state guidelines.¹²

One of the largest barriers of AVs to overcome is whether to proceed with LIDAR technology or multiple cameras to guide the vehicle on the appointed route. Other concerns are the current road infrastructure as well as existing vehicle technological infrastructure which will need to change to make fully automated vehicles feasible on U.S. roads. The determination of who is at fault when an AV is in an accident is another important decision, particularly for the insurance industry.

Another huge barrier to future consumer adoption of driverless vehicles is consumer hesitancy. Fourteen percent of drivers said they would trust riding in a vehicle that drives itself but 86% either said they would be afraid to ride in a self-driving vehicle (54%) or are unsure about it (32%). A poll by the American Automobile Association showed that respondents needed to be convinced that self-driving cars are safe before they embrace them. The national survey of just over 1,000 adults, conducted predominantly online but also over the phone in January, 2021, found that only 22% of drivers said they felt manufacturers should focus on developing self-driving vehicles. Most respondents (80%) said they wanted current vehicle safety systems, like automatic emergency braking and lane-keeping assistance, to work better and more than half (58%) said they wanted these systems in their next vehicle. The findings, the automotive group said, “signal that people are open to more sophisticated vehicle technology which, if they provide positive experiences for drivers, will open the road to self-driving vehicle acceptance.”¹³

How marketing research can help autonomous vehicle manufacturers and suppliers

Marketing researchers can assist manufacturers and suppliers with consumer insights as they develop AVs. Some particular emphases on the car and light truck side could include:

• Systematic qualitative and quantitative data from people who have had experience in robo-taxis.
• Tracking general consumer interest in AVs, including perceived benefits and obstacles. Comparisons of EV owner reactions with non-EV owners would be edifying as the EV owners can be seen as early adopters of new technologies such as AVs. Understanding what would encourage them to consider an autonomous vehicle for future purchase/lease/rental (including incentives and dealership test rides) as well as situations in which they would utilize an AV (work, vacation trips, etc.) would be of value to manufacturers.
• More clinic work with prospective consumers, to not only drive the technology development but also to test messaging to persuade the general public of unique elements of AVs (safety, savings on service, etc.). This data will also support sales projections as these vehicles come to market in the future.
• Awareness and reactions to the current development of autonomous trucks for shipping and other “behind the fence” activities.

Always been creative 

Automotive researchers have always been creative in studying this complicated and evolving sector. Electric vehicles and autonomous vehicles in particular will undoubtedly be the focus of new and existing insights-gathering approaches by market researchers in the years to come.

References

1 “Honda will build its own electric vehicles.” (2021). CNBC.com, June 28.

2 Lutz, Hannah. (2021). “The battery got in the way of mass adoption.” Automotive News, April 19, p. 20.

3 Bollag, Sophia. (2019). “California bans government purchases of most gas-powered cars under Newsom climate order.” Sacramento Bee, November 18.

4 Nelson, Steven. (2021). “President Biden unveils multi-trillion dollar infrastructure plan.” NYPost.com, March 31.

5 Foldy, Ben and Rebecca Elliott. (2021). “Shift to electric vehicles spurs bid to make more batteries in U.S.” The Wall Street Journal, January 26. 

6 Carrington, Damian. (2021). “Electric vehicles close to ‘tipping point’ of mass adoption.” The Guardian; January 22.

7 Mosquet, Xavier, Aakash Arora, Alex Xie and Matt Renner. (2020). “Who will drive electric cars to the tipping point?” BCG.com, January 2.

8 Farivar, Cyrus. (2021). “Federal regulators warn of risks to firefighters of electrical vehicle fires.” NBCNews.com, June 20.

9 Mays, Kelsey. (2020) “Which cars have self-driving features for 2020?” Cars.com, March 4.

10 “It’s 2020! So, where are the self-driving cars?” (2020). Route4me.com, March 14.

11 Bigelow, Pete. (2021) “Ramping up: Plus to roll big rigs on a ‘continuum’ toward self-driving future.” Automotive News/Shift Mobility Report, March, p. 17.

12 Kolodny, Lora. (2021). “TuSimple says its self-driving trucks shaved 10 hours off a 24-hour run.” CNBC.com, May 19.

13 Mohn, Tana. (2021). “Americans want self-driving cars, but want safety first.” Forbes.com, February 28.