About one in four owners of premium cars would buy a self-driving vehicle, according to Volvo’s chief executive, who has vowed to make the technology affordable.
Håkan Samuelsson said Volvo had had a deluge of interest in its “Drive me” trial in London next year, when 100 drivers will test its new autonomous driving technology on motorways and major roads. The Swedish carmaker plans to start selling vehicles equipped with the technology as early as 2020.
Volvo will test the technology in Gothenburg this year. It is also looking into conducting a trial in China, where congestion and road safety are major issues.
Speaking at a seminar on self-driving cars in London, Samuelsson said: “A quarter of customers for premium cars would be very interested in the autopilot function.” He added that the technology would be affordable. “It’s not a product where you have to rely on subsidies.”
With industry experts estimating that 90% of road accidents are caused by human error, Samuelsson said the technology “will save lives and reduce congestion”.
He predicted “substantial benefits to society”, with less time wasted by drivers sat in traffic. “Conference calls could be done in the car – it’s an extension of office hours,” Samuelsson said. “People will be able to use their time better. You can read your mails, watch a movie or just relax.”
However, this does not mean that driving licences will become a thing of the past. Samuelsson expects drivers to switch to autopilot when appropriate – for example, when they drive on the motorway.
James Dalton, head of the Association of British Insurers, said drivers would still have to be fully qualified, competent and sober. “I can’t see a scenario in the next 25 years where a driver gets into a car drunk and gets emailing on the way home. I don’t think the average consumer will accept that.”
He drew a parallel with an aircraft being flown on autopilot, with a human pilot sitting in the cockpit, ready to take over should something go wrong. He added: “The challenges of driving in London are very different from driving in rural Worcestershire.”
Volvo pointed to US government research predicting that self-driving cars will lead to an 80% fall in the number of car crashes by 2035. Samuelsson also referred to a 2014 study that estimated a saving equivalent to 2% of US GDP, or more than $400bn, in lower yearly accident-related costs if all cars were self-driving.
Car insurance premiums are also expected to fall, resulting in a financial hit to the insurance industry, which admitted it would have to adapt to what Volvo described as a “seismic” change.
Younger male drivers, who currently pay the highest premiums, stand to benefit. Tim Marlow, head of autonomous connected vehicle research at insurer Ageas in the UK, said: “Autonomy flattens risk.”
Marlow said insurers would have to move from a fault-based, or tort liability, system in which companies pay according to each party’s degree of fault, to a product liability system. Data recorders will help establish whether the vehicle technology or the driver is to blame in the event of an accident.
Dalton said this would be a big change for insurers, but also for car manufacturers, which would have to be adequately capitalised to pay out claims that could run into the tens of millions of pounds.
Experts said customers expected a streamlined claims process and warned that if a manufacturer went to court, it could take years to settle a claim.
Analysts said specialist motor insurers such as Admiral and RAC were under threat and would have to diversify into other areas such as home and pet cover.
Dalton said: “The insurance industry has been around since the 16th century. It has dealt with the emergence of ships and aircraft and it will deal with the emergence of self-driving cars. It’s a challenge and there will be a change but we are ready for it.”