The Fuse

Panelists: Autonomous Vehicles Will Change Perceptions of EVs

by Matt Piotrowski | June 28, 2017

  • By 2020, assuming all levels of autonomy are available, almost 60 percent of consumers would be interested in purchasing or leasing vehicles with levels 3-5
  • For Gen Z, level 5 AVs are the most appealing type of vehicle
  • Regulation and policy initiatives are still the most important factors spurring EV adoption

No single factor will determine the fate of electric vehicles (EVs) in the overall transportation mix, but the adoption of autonomy will go far toward making them more mainstream, according to an expert panel speaking at the Energy Information Administration (EIA) annual conference on Tuesday.

The session at the EIA event was titled “Global Transportation, Electric Vehicles, and Fuel Demand,” but the topic of AVs dominated the discussion at times, reflecting expectations of their growing importance in the space. Given the natural synergies between AVs and EVs, the growing interest and recognition of self-driving cars will spur a greater acceptance of electrification, the experts said.

Rebecca Lindland, and Executive Analyst at Kelley Blue Book (KBB), noted that 59 percent of consumers would be willing to buy vehicles with autonomous technology (levels 3-5) by 2020, assuming they are available at the time, with more than a quarter interested in full autonomy, based on research by her firm. “That’s a huge number,” she said. “We are seeing so much interest in these.”


In fact, just as many consumers want to purchase level 4 vehicles as they do level 2 cars, which dominate the roads now, reinforcing the argument that OEMs might be better served to skip level 3.


Even more crucially, changes in demographics favor autonomy over time, the panelists emphasized. Generation Z, which includes anyone younger than 18, will change purchasing preferences as they become bigger consumers. The population in this generation will be more amenable to using an automated system to travel, given that they are growing up with electronic gadgets. “They’re all in,” said Lindland.


Like many transportation experts, Lindland emphasized the synergy between EVs and AVs, highlighting that the needed computing power and artificial intelligence would be provided by electricity. Devin Lindsay of IHS Markit, also on the panel, made the same argument: “The reason why [AVs] favor electric is simply because of the power that’s needed to supply, first of all, the computing [requirements of the car]. Then it just gets easier … [to package] the vehicle. If the vehicle is going to be used for ride-sharing or ride-hailing, all those things favor an electric architecture.”

Slow consumer acceptance of EVs, but forecasts are more optimistic

Regulation and policy initiatives are still the most important factor now spurring EV adoption.

While there’s a lot of buzz around AVs accelerating the electrification of the car fleet, the panel acknowledged that the current EV market has lagged, due to regulatory uncertainty, low gasoline prices, improved fuel efficiency for automobiles with ICEs, and consumer preference. Consumer choice and low fuel prices remain the top barriers, but increased energy density of batteries, which will boost driving range, and expectations of further declines in battery costs provide a brighter outlook. Despite current headwinds, sales of EVs are still able to see sharp growth globally. Forecasts are becoming more bullish, too. For instance, Bloomberg New Energy Finance now sees EVs making up more than 50 percent of new vehicle sales by 2040, a sharp increase over last year’s projection.

Besides lower battery costs, continued government support for EVs, with aggressive targets in China and India as prime examples, will help boost sales. Regulation and policy initiatives are still the most important factors now spurring EV adoption, Melissa Lynes, an Industry Economist with the EIA, told the conference. There have, however, been some setbacks in this area, with Georgia nixing its EV tax incentives causing a sharp drop in sales in the state.

Prospects for oil demand

In terms of the impact of EVs on oil demand, EIA’s Lynes emphasized that the turnover of the vehicle fleet will be a slow process, pointing out that there are still a lot of vintage cars still on the road. “Oil companies will see it coming,” she said, arguing that there will be “time for everyone involved to react.”

Oil companies are more concerned about fuel efficiency than EVs. Conventional engines becoming more efficient can slow oil demand and possibly cause it to decline.

IHS Markit’s Lindsay said that EVs are not paramount enough to frighten the oil industry since they now represent less than one percent of total sales and their penetration will likely happen gradually. Instead, oil companies are more concerned about fuel efficiency, he said. Conventional engines becoming more efficient can slow oil demand and possibly cause it to decline, undermining guaranteed growth that the industry has relied on since its inception. “We’re talking 17 million vehicles a year are sold, and all of those vehicles are becoming more efficient and using less gasoline. That is what’s going to move the needle,” said Lindsay.