Market Penetration Model for Autonomous Vehicles on the Basis of Earlier Technology Adoption Experience

Abstract

This paper presents an effort to develop a market penetration model for autonomous vehicle (AV) technology adoption on the basis of similar technologies and previous trends in the United States. Generalized Bass diffusion models are developed on the basis of data from earlier technologies, including sales and price data on conventional automobiles and hybrid electric vehicles, and the use of Internet and cell phones. On the basis of the adoption patterns of earlier technologies, two values that represented the innovation factor (i.e., risk-taking capacity) and the imitation factor (i.e., culture and lifestyle preferences) were selected for AV market penetration. In addition, external variables (e.g., price of AVs compared with price of conventional vehicles) and economic wealth were incorporated into the model. The market size for AV adoption was determined on the basis of the use of the Internet, and a household was considered as the unit. Given the uncertainties in market size and the price of AVs, sensitivity analyses were conducted to understand the possible impacts of these factors on user adoption. In general, a larger market size led to a higher adoption rate, although the initial cost of AVs compared with that of conventional vehicles did not seem to influence the diffusion process much. This paper contributes to the literature through the addition of a quantitative analysis of AV market penetration on the basis of earlier technology adoption experience. The study results provided valuable insights in terms of possible market diffusion patterns and the impacts of different factors on user adoption.

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