Automotive > Infotainment & Telematics Blog

Disinformation from Deloitte

by Roger Lanctot | Jan 09, 2020

Deloitte published its “2020 Global Automotive Consumer Study” on the eve of the 2020 CES in Las Vegas concluding that 58% of U.S. respondents were unwilling to pay more than $500 for autonomous vehicle features and 54% were unwilling to pay more than $500 for a car with an electric powertrain. This is just the latest consultant’s report that either projects a sky-high $100B+ market opportunity within an absurdly short timeline or warns the industry away from emerging technologies doomed to failure.

Link to Deloitte study:

Deloitte dives right into doom highlighting its findings that the $500 cost threshold is a bridge too far for consumers regarding everything from safety to infotainment systems, electrification, autonomous operation, and connectivity. Deloitte tops off these findings by noting consumer resistance to sharing vehicle or personal data, and an abiding lack of interest in multimodal transportation options – i.e. “mobility.”

I can imagine report readers getting off the Deloitte bus immediately upon reading these pronouncements. Industry participants from car makers to their suppliers are well aware that consumers are, in fact, embracing and happily paying for new technologies from advanced infotainment and safety systems to mobility in all its forms.

Is there consumer trepidation regarding sharing vehicle or personal data or, indeed, regarding cybersecurity vulnerabilities? Sure. But the industry is addressing those concerns and companies such as Tesla Motors are telling customers every day that if they want the experience of owning a Tesla, they will need to share certain aspects of their vehicle usage information. In fact, Tesla is not alone in this regard - and car buyers are opting in.

In fact, the growing ubiquity of Tesla vehicles in transportation fleets is a clear sign of the power of both electrification and semi-autonomous vehicle operation to redefine consumer impressions and attitudes. Local Las Vegas taxi and limousine fleet operator Kaptyn has deployed Tesla vehicles as part of a fleet upgrade with reported plans to add hundreds more. Just yesterday came word that Daimler is ordering 60 Tesla vehicles to add to its Free Now ride hailing/taxi fleet in Europe.

Regarding Daimler’s decision one must bear in mind that Tesla has swiped huge chunks of market share from German auto makers such as Daimler, Audi, Porsche, and BMW. The Daimler purchase comes as Tesla is preparing to build its latest factory outside Berlin. These are truly stunning, and humbling, developments for the German auto industry - yet Daimler itself is choosing to sleep with the enemy - or at least the competition.

Sadly for Deloitte, the reality is that technology adoption in the automotive industry is being driven both by regulators and by concerns regarding the cost of vehicle ownership. From a regulatory standpoint, electrification is being pushed and promoted by go-green governments around the world. Those same regulators are mandating an increasingly diverse array of sensor-driven safety systems.

Like it or not consumer choice is becoming somewhat irrelevant in the realm of safety systems.  But consumers are themselves not blind to the fact that EVs, while more expensive to buy are less expensive to own.

This reality has been overwhelmingly embraced by a growing roster of fleet operators who can see the extraordinary reports of Tesla vehicle longevity and reliability – particularly in the context of the heavy use associated with fleets such as rental cars and taxis. 

With Tesla Motors now boasting a market cap exceeding most global auto makers, one would expect Deloitte to be bringing a far different message to the world. At its technology conference at CES 2020 Deloitte welcomed car companies to the stage to discuss these very issues.

The last thing that executives from legacy auto makers need hear today is that car buyers don’t want to pay for electrification or safety or connectivity or infotainment. Research findings such as these represent nothing less than marketing malpractice.

One can imagine Elon Musk clucking over his morning latte as he digests the disinformation from Deloitte. Make no mistake. If there is one thing that is clear from CES 2020, it is that consumers are embracing advanced vehicle technologies and auto makers and their suppliers have redoubled their efforts to keep pace in order to continue to delight their customers and differentiate themselves from the competition. It makes me wonder what the analysts at Deloitte are driving to and from the office these days. Maybe they take the bus.

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