Yes, to AI functions in cars – but no to extra charges

The study entitled ‘AI as Game Changer: The New Driving Force of the Automotive Industry’ shows that global use of AI solutions is the next stage of development for cars and for automobile manufacturing. However, the automotive industry is more cautious than other sectors when it comes to investing in AI computing capacity, teams, and budgets. Clearly, many stakeholders remain uncertain and undecided. The study analyses and evaluates the potential and added value of using AI – along the entire value chain, from development to production to application in the vehicle.

User expectations are a key factor

The user perspective is particularly revealing: Are car drivers familiar with AI applications? What are their expectations and is there a willingness to pay? An international, representative population survey for MHP’s study provides answers and outlines the views of 4,700 car drivers from China, the US, Germany, the UK, Italy, Sweden, and Poland.

Many vehicles already use artificial intelligence in a variety of functions. It improves and enables autonomous driving, personalised entertainment, driver assistance systems, intelligent route planning, and predictive maintenance. Up to 79% of respondents are interested in the last three of these functions.

However, only around 60% say that they understand the use of AI in cars. In China, more than 80% of respondents state this, whereas in Europe this figure is only 54%. Here at least, there is therefore a need to catch up when it comes to transparency and background information on AI.

Europeans are sceptical about opportunities – and rarely willing to pay

Global differences are also evident when it comes to assessing opportunities and risks: 48% of Chinese respondents see in-car AI predominantly as an opportunity, while only 23% of European respondents do so. Of the latter group, 39% think that AI opportunities and risks are broadly balanced. Some 24% take a negative view, believing that the risks currently outweigh the benefits.

AI-supported enhancements to cars also meet with a mixed response. AI functions would motivate 84% of the Chinese drivers to buy a vehicle and 48% of the European drivers. If manufacturers were to charge extra for optional AI applications, the willingness to pay would be extremely low. Of the European drivers, only 23% are willing to pay, as opposed to 39% of the Chinese drivers. A fixed extra charge is mostly likely to be accepted at the point of purchasing the car – less so for activating features later on or for flexible/monthly use. So, the conclusion is: Users would not buy in-vehicle AI applications – they expect such functions to be standard. For manufacturers, that means aligning AI-based business models in vehicles so that they generate the highest possible (financial) benefit while also increasing the user experience.

“The figures show that the prospect of greater safety and comfort due to AI can motivate purchasing decisions. However, the European respondents in particular are often hesitant and price-sensitive,” says Marcus Willand, Partner at MHP and one of the authors of the study.

Some good news for established car manufacturers: When it comes to the use of AI, customers trust them more than technology firms such as Apple, Google, and Microsoft (64% as opposed to 50%).

Using AI profitably in companies

The use of artificial intelligence promises to bring new competitive advantages for the sector as a whole, not just in vehicles. AI technology in development and production will drive the automotive industry forward. The study provides specific examples for such business models, including:

• Pattern recognition: AI can recognise, categorise, and predict visual, acoustic, and other physical anomalies. This helps businesses identify errors and trends, for example in the quality management of component production or assembly
• Data management: AI helps businesses harmonise large quantities of data, analyse information, and obtain findings from aggregated vehicle data
• Decision-making: AI enables recommendation systems that speed up decision-making processes and support them with facts, such as for price adjustments in regional mobility markets
• Communication: AI-based chatbots and voice recognition/control simplify interaction between humans and machines, e.g. in customer service

“It is worth OEMs and suppliers considering the opportunities offered by the new technology along their entire value chain,” says Augustin Friedel, Senior Manager and one of the authors of the study. “However, the possible uses are diverse, and implementation is quite complex.” The study therefore provides a concise introduction with facts, figures, and recommendations for action as well as strategic guidelines for the automotive industry.