Growing Link Between Autonomy and Electrification—A Technology Tipping Point?

April 18, 2018

The growth of the electric vehicle (EV) sector provides an opportunity to create true diversity in the transportation sector, as synergies between autonomy and electrification provide a big opportunity to move away from petroleum’s dominance. The growth in the EV sector continues to be impressive with sales of light-duty EVs rising by 32 percent year-on-year in the first quarter to more than 54,000 and forecasts showing expectations for more sharp increases. Additionally, we are seeing significant growth for EVs in the medium, heavy duty, and transit sectors, places most wouldn’t immediately think of EVs as a choice. While these trends are all positive, EV sales still account for only 1.3 percent of the overall market in the United States and aren’t quite at the point of significantly decreasing oil demand.

With vehicles that are autonomous, connected, electric, and shared, the benefits are widespread: less congestion, a decrease in accidents, easier urban travel, reduced fuel consumption, and lower emissions.

Nevertheless, the acceleration of EV transition could be on the verge of an interesting technology tipping point. As we quickly expand self-driving technology, it has the potential to accelerate the adoption of electrification and maximize the benefits of an EV—lower operational costs, less maintenance, and ubiquitously available domestic and diverse electricity as the fuel. As part of the Electrification Coalition, a nonprofit committed to establishing deployment communities to facilitate the adoption of EVs, we have been educating the public and policymakers about these benefits to help facilitate adoption.

Crucially, synergies between autonomy and electrification provide an opportunity to slow global oil demand. The connection between the two has been prevalent in testing of self-driving cars. As of January, the California DMV had issued permits to 50 different companies to test autonomous vehicles (AVs) on public roads. An analysis by Securing America’s Future Energy (SAFE) indicates that 87 percent of AV models being tested in California (the only state so far that has adequate data) are utilizing alternative fuel powertrains.

Data reinforces the belief that a majority of AVs will very likely run on electricity. The decision to electrify an autonomous fleet makes perfect economic sense.

This data reinforces the belief that a majority of AVs will very likely run on electricity. The decision to electrify an autonomous fleet makes perfect economic sense, even if initial costs to manufacture are slightly higher. EVs are cheaper to operate than ICE cars when miles per vehicle rise, providing financial incentives for both fleet operators and consumers to use them. A group of researchers at the Lawrence Berkeley National Laboratory, in a recent report about automated taxis in New York City, show that the use of electric cars that are autonomous would lower the costs by an enormous 29-61 cents per mile compared to traditional taxis.

With vehicles that are autonomous, connected, electric, and shared, the benefits are widespread: less congestion, a decrease in accidents, easier urban travel, reduced fuel consumption, and lower emissions. The Berkeley report quantifies some of the positives: Using electrification for fleets of automated taxis would reduce GHG emissions by 73 percent and energy consumption by 58 percent compared to a fleet using internal combustion engines.

The trucking and transit sectors will also likely see changes due to autonomy and electrification. With freight deliveries expected to increase by 40 percent through 2040, automation is poised to be a key factor in helping alleviate many of the pressing problems for fleet operators and the trucking industry. There has already been testing of autonomous electric freight trucks. The trucking industry is likely to be an early adopter of autonomous technology since freight transportation on highways is typically more predictable and less complex than driving on urban roads.

Synergies between autonomy and electrification provide a big opportunity to slow global oil demand.

The higher number of EVs versus ICE vehicles currently being tested is a clear change from auto sales in the United States today, where approximately 200,000 EVs were sold last year out of a total 17.3 million vehicle sales. The discrepancy between the current market and the use of EVs in AV testing reflects that many tech giants, car manufacturers, tier one suppliers, and tech startups are anticipating that the future transportation system will be both electric and autonomous. Indeed, the transition to self-driving EVs may be occurring faster than most people think, based on companies’ aggressive plans. Waymo plans to deploy electric SUVs for its self-driving taxi service starting in 2020; GM is looking to manufacture a Chevy Bolt without a steering wheel next year; Uber late last year announced an agreement with Volvo to buy 24,000 self-driving vehicles from 2019-21. Other companies have also made public similar plans.

The need for public, legislative support for autonomy and electrification

Besides corporate strategy that supports autonomy and electrification, there are also positive developments on these fronts in both public opinion and policy making. U.S. consumer perceptions toward AVs are shifting more in their favor—although accidents such as the one in Tempe, Arizona could instigate fears and set back efforts to get more riders to embrace autonomous technology. Multiple longitudinal surveys—such as those conducted by AAA and Deloitte—show that Americans are becoming more comfortable with the idea of riding in AVs as companies have put together public campaigns to educate consumers about the safety benefits of autonomy and more vehicles are now using semi-autonomous features such as automatic braking. Experts say that transportation-on-demand services, such as Uber and Lyft, should contribute to consumers becoming more comfortable with AVs, hastening their acceptance.

Besides corporate strategy that supports autonomy and electrification, there are also positive developments on these fronts in both public opinion and policy making.

At the same time, comprehensive policy support for both technologies is vital to continue current momentum. In last year’s tax overhaul that was signed into law in December, the federal tax credit of $7,500 for a purchase of a new EV was kept in place. This will help vehicle manufacturers achieve economies of scale, and should remain intact until battery costs fall enough to be competitive with the upfront cost of ICE vehicles and until more charging infrastructure is put in place.

On the autonomy front, passage of comprehensive federal legislation will help provide manufacturers with a stable regulatory framework so that they can move forward with initial deployments. Moreover, a nation-wide law ought to give consumers more knowledge about the new technology and increase confidence that the proper safety measures have been put in place. The House’s AV legislation passed in September, while the Senate version has passed through committee but has yet to see a floor vote—though it has majority support.

Initial signs are encouraging that autonomy will help accelerate EVs market growth and quicken the pace that the transportation sector can break its addiction to oil.

Despite the promise of the connection between electrification and autonomy, it is not a forgone conclusion. Testing data is so far limited, and the technologies are still emerging. Moreover, ICE vehicles dominate the roads today and will continue to do so for the foreseeable future. But initial signs are encouraging that autonomy will help accelerate EVs market growth and quicken the pace that the transportation sector can break its addiction to oil.

To learn more about the SAFE and EC’s work on Autonomy and Electrification—come listen to the panels at the upcoming ACT Expo or get involved directly with the AV Task Force or the Fleets for the Future Campaign. Natalia Swalnick, Director of Electric Vehicle Programs, Electrification Coalition, will moderate a panel at ACT Expo on procurement strategies for fleets and Amitai Bin-Nun, Vice President of Autonomous Vehicles and Mobility Innovation, Securing America’s Future Energy, will speak on a panel about efficiency through connected and automated technologies.