At CES, A CASE For The Future of Mobility

From faster, more affordable electric motorcycles to an autonomous shopping cart that follows you like a well-trained pet–mobility was on everyone’s minds at CES 2020 last week. But it wasn’t just the vehicles themselves that stole the show, it was also the CASE (Connectivity, Autonomy, Shared mobility, Electrification) technology that is enabling this next generation of mobility products.

How do global consumers feel about CASE? Are they willing to pay a premium to cover automakers’ investments in this technology? And how is the auto industry transforming itself, to integrate CASE technologies into vehicles? These were just some of the subjects being discussed at the show. Here are some answers:

Paying for CASE

Carmakers have a problem: consumers have gotten used to snazzy new technology that’s integrated into their new vehicles at no extra cost. Think of proximity sensors, for parking or safety, or retractable side mirrors. None of these are priced separately, although they are valued. By this logic, consumers think, neither should carmakers charge a premium for high-value gadgetry. I especially like Toyota’s AI-driven in-car agent, which is being developed in partnership with Israeli startup Intuition Robotics), or even for game-changing power tech like supplemental solar roof charging for electric vehicles.

Research from Deloitte, released at the show, backs this up. For example, up to 70% of consumers in Japan and Germany would not be willing to add an additional $500 to the sticker price in order to get Tesla-style autonomous vehicle functionality. In the US, 75% of consumers wouldn’t kick in an extra $500 for infotainment features, no matter how cutting-edge. And in Korea, upwards of 60% wouldn’t pay extra for connectivity features. See the trend?

Yet R&D for CASE is costly. And demand among consumers remains high–because it is precisely these features that can still differentiate brands and models when traditional differentiators become commodities (think gas mileage or air bags). And if consumers aren’t willing to foot the bill, who will? Because the fact is that high development costs are one of the key reasons automakers are showing lower financial results.

According to Deloitte, one way carmakers are tackling the “who’s gonna pay for CASE” challenge by acquiring technology startups and setting up joint ventures or joint development frameworks like Ford’s Israel research center, opened in 2019. Yet even these significant steps may not be sufficient. So what else can carmakers do?

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