Great technological solutions often go unused because of mismatches between who pays and who benefits.
Electric vehicles (EVs), for example, provide clear benefits – improved air quality in cities, less noise pollution, and lower CO2 emissions. However, sales remain minimal because those benefits are societal, while the costs are personal.
People who buy gasoline-powered cars spend far less than EV buyers but still get cleaner air and less road noise when their neighbors buy a Chevrolet Bolt EV. Governments have tried to shift benefits from societal to personal with tax incentives – penalties for gas guzzlers and tax credits for EVs – but the cost differential remains high and EV market penetration remains low.
Better batteries, electric motors, and materials have lowered EV production costs. Nissan officials say the 2018 Leaf EV costs less than $30,000 before federal tax credits ($22,750 after credits). That’s still more than a similarly sized Nissan Altima sedan, and the extra cost for improving the environment is absorbed by the buyer.
Autonomous vehicle technology, on the other hand, is more promising. Systems offer societal and personal benefits. Theoretically, robotically driven cars should be safer and more predictable, reducing traffic deaths and making roads safer for human drivers – a societal benefit. It’s not clear yet that self-driving cars will generate those safety improvements as so few are on the road today, but on paper, it should benefit society.
On the personal side, individual vehicle owners can use the time spent traveling between home and work more productively – sleeping, reading, eating, or watching television. Turning drive time into relaxation time is an extremely luxurious feature, so technology developers expect to see it on luxury cars first (see cover story, pg. 24).
Luxury features often migrate to the mass market as costs fall – hands-free calling, antilock brakes, electric windows, backup cameras – but not all of them make it – real-leather interiors, large touchscreens, head-up displays. To dramatically improve transportation safety by taking human unpredictability out of the equation, autonomous driving technology will have to be incorporated into most if not all vehicles.
Given the expense and engineering difficulty of making autonomy work, costs may never fall to the point where low-cost vehicles can be equipped with such sensors, control systems, and computing power.
So, there’s still a gap between obtaining the greatest societal benefit and figuring out who’s going to pay the costs.
Ridesharing may be the answer. In this issue’s cover story, Erik Coelingh, technology advisor for autonomous vehicle technology company Zenuity, discusses robotaxis, vehicles designed to shuttle people around cities as efficiently as possible. They will have to be expensive enough to pay for sensor suites and communications systems needed to support autonomy, yet they will likely be profitable for fleet owners if they can maintain constant operation.
With luxury cars advancing autonomous technology for individual drivers and robotaxis pushing it for the less affluent, a clearer picture emerges on how to pay for a technology that could provide improvements for all of us.