Insights from McKinsey's Mobility Pulse

This morning I was fortunate enough to attend a briefing on McKinsey's Mobility Consumer Pulse for 2026. A few items caught eye given the considerable levels of uncertainty in today's auto industry...

Yes, there's an affordability crisis, and we now know how consumers are responding. I heard a hypothesis the other day that expectations on tariffs might have caused a run on new vehicle purchases before prices went up. Now that they are up (and going up further), consumers are either looking to trade down on their next purchase or holding onto their current vehicles for longer. The good news is that several automakers have announced plans for more affordable vehicles (although they are at least a year or more from the market).

The news on the next generation of car buyers (GenZ/Millennial) is largely what you might expect: they are more interested in advanced driving assist technology (and more likely to switch brands to get it), more open to buying a Chinese EV, and more likely to use AI (and multiple channels) to shop for a new vehicle. Curiously, even though they are less reliant on the dealer, they are more interested than older buyers in a personalized interaction.

The news on electrification is also what you might expect. EV intenders are more likely to switch brands (especially in the US), reflecting the shifting EV landscape, and current EV owners are also very likely to stay with an EV. And more than half of households with both ICE and EV in the fleet are likely to note their next vehicle will be an EV. But there is still a nontrivial core group of consumers who have absolutely no interest in an EV.

The biggest surprise came in the data on how premium brands can differentiate themselves. While the current factors are the usual suspect--quality, heritage, design, and comfort--that isn't expected to be the case in 10 years. As the slide notes, ADAS and powertrain technologies (as well as sustainability) are displacing the attributes one usually associated with a luxury brand. That bodes well for the Chinese as they move upmarket--and poses a threat to legacy luxury brands.