Technology Pricing

A simulation forecasted the annual adoption rates of connected and autonomous vehicle (CAV) technologies over the next 30 years (2016 to 2045). Current prices for function-specific automation (Level 1) and combined function automation (Level 2) are estimated by analyzing packages provided by car manufacturers. Prices to add connectivity, limited self-driving automation (Level 3), and full self-driving automation (Level 4) were estimated based on experts’ opinions. The simulation assumed that households’ willingness to pay (WTP) to add CAV technologies do not change over the years, but rather that adoption occurs as reductions in technology prices take place. Table 1 shows an example for the annual price reduction rate of 5 percent.

The study additionally estimated added purchase price costs for automation and connectivity capabilities (on top of base vehicle costs) to be $10,000 at the 10 percent market penetration level, $5,000 with 50 percent market penetration and $3,000 in added cost once CAV market penetration levels reach 90 percent. These values are consistent with estimates from comparable studies in the literature.