Awareness and Consideration for Chinese Automakers Grows as Privacy and Secutiry Woes Fall

by Robby DeGraff, Manager of Product and Consumer Insights

With every passing year, our AutoPacific team continues to conduct research on vehicle shoppers in an ongoing effort to learn what American consumers think of Chinese automakers...because they will be here at some point. Last week, I dove into our latest batch of data to see if perception has changed at all compared to last year's Future Attribute Demand Study or “FADS”, and well, things are trending in a rather surprising direction.

Even as geopolitical tensions and tariff tirades distance China and the United States, consumers are becoming increasingly aware of Chinese automakers. Note this jumped 12% pts YoY over numbers from our 2024 FADS Study, with 22% of the 18,987 consumers we surveyed in this year's study saying they are "very familiar" with 43% saying they are "somewhat familiar".

Additionally, half of the Americans we surveyed in this year’s study told us they are also much more likely (up 10% pts. points from 2024) to consider buying or leasing a Chinese-brand vehicle when they do become available. As a result of that, certain Chinese brands are catching the eye and attention of these interested stateside vehicle shoppers, with Huawei (27%), Xiaomi Technology (23%), and BYD (19%) ranking as the top three most considered out of several automakers listed in our study.

What makes this all very shocking is that lingering consumer concerns and worries regarding privacy and national security threats if Chinese-brand vehicles are sold here in the U.S., are beginning to subside and fall.

The Top "Must-Have" Vehicle Feature for 2025 is All-Wheel Drive

By Deborah Grieb, Director of Marketing and Insights

Everyone has "must-have" and "nice to have" features when it comes to vehicle shopping. Those features that they won't buy a vehicle without, and those that they would be willing to forgo if needed. AutoPacific's newest Future Attribute Demand Study (FADS), which surveyed more than 18,000 consumers who plan to buy or lease a new vehicle in the next three years, captures these differences for the first time to provide even greater insight into feature demand to automakers, suppliers, and marketers.

The top "must-have" feature for 2025 is all-wheel drive, with 63% of all respondents who want the feature saying they won't buy a vehicle without it. A closer look at demand reveals that older vehicle intenders are more likely to consider it a must-have feature compared to younger intenders, yet must-have demand is strong across all generations. Our comprehensive data, like the scope presented here, enables deep-diving into feature demand by looking at intender demographics, psychographics, segment and powertrain intention, brand consideration, and more.

What Does the All-New Nissan Leaf Mean for EV Affordability?

By Ed Kim, President and Chief Analyst at AutoPacific

I recently got the chance to spend a few days with the all-new 2026 Nissan Leaf, now in its third generation and representing the biggest change to this nameplate since its launch for the 2011 model year. The third-generation Leaf has morphed from the unpopular five-door hatchback bodystyle to a much more fashionable coupe-crossover shape, and not surprisingly, it’s light-years ahead of the prior two generations in terms of technology and general appeal.

The new Leaf launches at a very awkward time. The latter half of this decade was supposed to usher in the next wave of EV adoption via much more affordable EVs. AutoPacific’s own data from our annual Future Attribute Demand Study has consistently shown that among EV rejectors, price is one of the biggest rejection reasons, and that a strong choice of appealing EVs priced below $35,000 would make many EV rejectors reconsider. And certainly, automakers were poised to address the EV affordability issue with models that would have - with the now-canceled Federal tax credit for zero-emissions vehicle purchases and leases, meant multiple EV models effectively starting in the low-$20,000 range.

The Leaf is built in Japan alongside the now-discontinued (for the U.S.) Ariya because of its platform and parts commonality with Ariya, meaning a big part of the new Leaf’s supply chain is already in place in Japan. This also means it would not have qualified for the now-defunct $7,500 tax credit for EV purchases since it’s not built in the U.S., but it would have still qualified for the full credit when leased.

With the tax credit now gone AND now a 15% tariff on imported autos from Japan, the business case and value proposition for Leaf have changed dramatically right as it arrives at U.S. dealers. Make no mistake - the pricing of the new Leaf is impressive with the 303-mile S+ version starting at under $30,000, and the loaded Platinum+ I drove starts at just under $39,000. But the tax credits would have effectively reduced those prices by $7,500 when leased, making it a truly affordable EV with pricing on par with - or even below - comparable gasoline-powered small crossovers. But with the tax credits one and now a 15% tariff applying to the Japan-built Leaf, all that is out the window. Talk about unfortunate timing.

In fact, these developments affect a whole host of affordable EV models hitting the market over the next couple of years. Automakers like Ford, Chevrolet, Stellantis, and even newcomers like Slate also plan to launch affordable EV models in the next couple of years. But they won’t be as affordable as they would have been with the tax credit, and that will contribute to the EV adoption slowdown that we will continue to experience in the years to come. Previously, AutoPacific had forecast affordable EVs to power the next wave of EV adoption. But with that affordability greatly compromised, entry-level EVs won’t have the outsized impact on EV adoption growth that they were once expected to have.

Having said all that, Nissan has definitely worked to make the new Leaf as affordable as possible. The S+ model, with 303 miles of range, starts at $29,990, the same starting price as the 2018 Leaf that could only muster 151 miles of range (though the 2018 model would have qualified for the tax credit, bringing the effective price down by $7,500). And the $38,990 Platinum+, which I tested, has an artfully designed and upscale interior and luxurious feature content that feels truly premium and is one of the best Nissan interiors I’ve seen in years. And the user experience is excellent with SV and Platinum+ models using excellent Google Built-in software with embedded Google Maps and Google Play Store for additional apps, such as Spotify. Dual 14.5-inch screens in the SV and Platinum+ are impressive in their clarity and ease of use, but even the cheapest S+ model uses dual 12.3-inch screens - large even by luxury car standards. The only notable demerit inside is the fairly tight back seat compared to other small EVs like the Hyundai Kona Electric, Kia Niro EV, or the soon-to-return Chevrolet Bolt.

It’s an exceedingly pleasant thing to drive too. It’s not an enthusiast vehicle by any means, but that’s not its mission. It accelerates quickly enough, it’s very quiet inside, the suspension is tuned to be very comfortable and very nicely damped, and the steering is devoid of feel but still quite precise. Only a squishy brake pedal lacking in feel detracts from the driving experience.

Because EV drivers in the U.S. will be dealing with charging adaptors for years to come, with the slow transition to the Tesla-based North American Charging Standard (NACS), Nissan has thoughtfully provided a wonderful solution with two separate charge ports. The left charge port is a standard J1772 type for slower Level 1 or 2 AC charging (as one would do at home), meaning no adaptor is needed to use the most common home charging standard. The right-side charge port has a NACS port for DC fast charging at Tesla Superchargers, and the driver will need a CCS-to-NACS adaptor to fast charge on a non-Tesla charger. I recently spent time with a Hyundai IONIQ 9 with only a single NACS port and quickly realized that it needed not one but two adaptors if I wasn’t using a Tesla charger, one for AC charging at home and another for DC charging on the go. That was inconvenient. I prefer Nissan’s solution of only requiring one adaptor, and only for DC fast charging.

So, bravo to the new Leaf as a product. But I can’t help ponder the effect this and other upcoming entry-level EVs would have had on EV adoption rates without the double whammy of the loss of the tax credit and tariffs on imported vehicles and parts (the latter still affecting U.S.-built vehicles). To be fair, though, the Leaf Platinum+ feels worth every penny of its $39,000 price tag, even compared to gasoline-powered equivalents like the Mazda CX-30 Premium Plus or Toyota Corolla Cross Hybrid Limited. And the value proposition is undoubtedly even stronger in the cheaper S+ and SV models. But without the $7,500 break on its price when leasing, can it have the same impact on EV adoption growth that it would have prior to September 30? Probably not, and that’s unfortunate.

As Volvo Turns 70 in the U.S., Human-Centric Mindsets Remain Firmly Intertwined in the Brand's DNA

by Robby DeGraff, Manager of Product and Consumer Insights

Volvo, the humble hygge-focused automaker who marks 70 years in the U.S. market, is beginning its next saga where domestic assembly and flexible electrification become the pinnacle focus. Midway through the 2020s, the Volvo lineup has and continues to evolve, with consumer tastes dictating segment and powertrain strategies. Sedans and wagons are traded for more popular, in-demand crossovers, while ICE and various forms of hybridization are still increasingly preferable over pure EVs.

A lot has changed for Volvo. The automaker once aimed to have 100% of annual global sales be of EVs by the end of the decade. A month ago, that target was scaled back to meet ever-changing conditions due to the rate of EV adoption unsteadily accelerating and decelerating, especially here in the United States, where consumer hesitations are loud and the geopolitical environment rocky. Now, Volvo intends for 90% to 100% of its yearly sales worldwide to include both plug-in hybrids and full EVs, the latter 10% accounting for MHEVs.

In order to reach that goal, Volvo is adapting, with a strong push for greater domestic production to not only shield itself from tariffs but deliver product to North America at a much quicker, more reliable pace. Rewind to 2017, the modern 2.3 million sq. ft. plant in Ridgeville, South Carolina, came to life via assembly of the S60 sedan, which was also shipped overseas. Today, Volvo’s sole U.S. plant is home to production of the flagship three-row EX90 as well as the Polestar 3. Both EVs share one assembly line as several components, bits, and key pieces are interchangeable. At full capacity, the plant is capable of building 150,000 units per year. Volvo’s not quite there yet, but will be soon.

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Reaffirming its decade-plus of investment (a grand $1.3 billion) and commitment to boosting the state’s economy, more products are coming as early as next year. In September, Håkan Samuelsson, who exited retirement to serve a two-year term as Volvo’s CEO, confirmed at a ribbon-cutting ceremony that the next generation of the brand’s best-seller in the U.S., the XC60, will join the assembly line next year alongside the Polestar 3 and EX90. This is undoubtedly a smart move, making the popular cash-cow readily available, given the XC60 is currently imported from Torslanda (Sweden) and faces an overseas journey.

Additionally, Samuelsson revealed another product slated to enter production at the Charleston Plant before 2030: a new “next-generation hybrid model” that we expect to be an extended-range electric vehicle (EREV) flavor of the next XC90. During a roundtable discussion with top brass at Volvo, we learned this model will indeed be aimed directly at large families and move using a battery pack to drive the wheels with a gas engine as a backup, or, as Samuelsson explained, the opposite of the brand’s T8 plug-in hybrid setup in which the propulsion duties are reversed.

During my recent hosted trip to the Charleston Plant, I sat down with Luis Rezende, Volvo's new President of Americas, to chat about the flexible path toward electrification, if sedans are coming back, brand identity, and much more. *interview edited for brevity and clarity*

Robby: Brand identity seems to be a struggle for some automakers, especially some of today’s luxury makes. I feel as if Volvo's own brand identity and personality are strong and unique enough to bring in new buyers and retain those repeat customers. How can you ensure that Volvo’s image is maintained heading into the rest of this decade and into the next?

Luis: That's a good one. I think safety is our DNA. It has been since our foundation in 1927. Our founders said, “Cars are driven by people, so that's why they must be and remain safe.” This is in our everyday, so we do really celebrate when I get emails about “Volvo saved my life.” It's something that touches us, and so it gives you a purpose to come to work every day. I feel proud of the people here building these cars, because it was designed and imagined like that. Volvo will remain very firm on this. 

But not only that, our Scandinavian design makes us unique. We are the only one coming from that part of the world. Yeah you can say “Ah it's Europe,” but no, it’s like the U.S., Wisconsin is different than Florida. I think that's also a very important part of our DNA. On top of that: technology. We are becoming so strong on software-defined-vehicles that Anders was talking about including some bump in the history (the launch of the EX90 and its software issues), but the capability that the car will give is so much, because now we have a huge battery behind it, we have a computer with the capacity of processing data in a way that is it's never been imagined. I think all of these designs- when you have in mind Scandinavian design and safety as the backbone, and human-centric, this is the fundamental things that we will never change. No matter the CEO, no matter what is coming, this has been preserved. Even when I have a change of controls under Ford, Volvo AB, Ford, then the Geely group, and our listed company, we have never, ever lost this. I think that is one of the key elements that makes us different from the other brands, and that's why it’s so attractive and so respectful when you ask anyone about Volvo, their automatic response will be “safe” and the safe to why? Because we care about people. Period. 

The other thing that we're going to do is how we're going to market this. That's a different way of exploring the message. We're going to treat the U.S. in a different way than has been done before. In my previous job, I was running 58 countries. Now we’re going to treat U.S. as “50 countries.” Again, Florida is different from your region, from California, from New York. Completely different approaches. This is what we're going to target. You will always see safety, Scandinavian design, and human-centric at the center; however, the approach will be a little bit different. Maybe more “cool” in Miami, maybe more “nature” in your region (the Midwest), maybe more “trendy” in Los Angeles. That's the way that Volvo will become, and you can already start to see how we are advertising this across. To me, it is one of the fundamental things that we're going to have.

R: I feel when I’m behind the wheel of a Volvo, compared to say a Mercedes-Benz or a BMW…that human-centric design you spoke about is so evident, inside and out. I feel calm and at ease. The interior space is focused on me...I'm comfortable and safeguarded.

L: Every function that we have must have a meaning. This is Scandinavian design. We don't do things because it’s “bling-bling” or lights because it “should be lights.” No, everything has a meaning inside the car. When you do that and people perceive it, the value of the product you have is just amazing. 

The value goes even further in an EV. That’s another level because of the silence, acceleration, everything that you need…the car delivers to you. Maneuvering within the infotainment system, now with Google Gemini, the response is so fast. That's a kind of thing that is only getting better, better, and better. Imagine, SPA 2 was our first platform. Now we're going to bring this into a “master computer.” SPA 3 is coming, that is the EX60 we’re going to launch at the beginning of next year. It's coming with all the learnings that we have from SPA2, but with an even bigger battery and even bigger capabilities to generate and process data. Imagine then going further, the ability that we're going to have to update all of those cars, even the one that you bought like a SPA2 vehicle in 2025, in three years’ time…no one like Mercedes-Benz or BMW will be able to do that. It's a fundamental change, but it's a hell of an investment.

The excitement, to give you insight on it, imagine…we needed to design a car today that we're going to sell (or the platform and computer) 5 million of these. And, we need to be prepared to design software for people even though they have no clue that they will need this in the next three or four years. That's the mindset that we need to have, that's the beautiful part, and that's why he (Anders) was just like, “It's so amazing.” We’re a company that’s been here in the U.S. for 70 years, and we never lose our focus.

R: Always forward.
 
L: Always forward, always human-centric, safe, Scandinavian design.

R: When we think about moving forward, other premium automakers still offer sedans and remain committed to those segments. Do you feel as if it’s a good decision to have a lineup of only crossovers and SUVs here in the U.S.?

L: Today, we have only SUVs or crossovers, which was where the market was trending, the growth was going, and we captured that movement. I think there are a lot of questions about sedans still, and I Luis, personally, would love to have a sedan in the portfolio, because I think we would be going into a place that today, unfortunately, I cannot attend. That is something that we keep in discussion, but those are investments that need to be discussed versus having a new EV, or a new platform, or a new PHEV. All of those investments will drive us for the next 10 years. Those decisions are not easy to make, but I think for the moment, we are right. The decisions we have to make for the future are hard to predict, but as much as I can play…offering the customer the possibility of buying what they want, not what I want them to buy, and expanding the range of people, would make my life easier. 

R: With EX30 production now coming from Ghent and not China, you’ve removed a lot of the big tariff threat, and pricing is lower. Do you feel there’s room to bring in even more of an entry-level shopper into the Volvo brand?

L: I think the price of the EX30 today is the right price. The EV market has been shaking because of this federal tax credit. The credit going away, I think, is going to put us all on the same base, and all the brands will be without these incentives. Then we can discuss what the price is going to be because I don't know if $40,000 will be the “new $30,000”. That is something we will need to make an analysis of very carefully. 

What I know is that the EX30 will be very competitive, that's for sure, no matter where it goes (pricing-wise) it will be. It’s going (sales-wise) as we want. This year is going to be the first year of the car, but I can tell you that the combination of the EX30 plus EX90 is making it the best year for EV sales in the U.S. 11% of our portfolio will be EVs. That says a lot. The demand of this car is high in our dealers, much more than we were predicting a few months ago.

We have the XC40 in the same price range as the EX30. We have a bigger ICE car and a smaller, newer electric. This is saying a lot because then we start to understand that we have a consumer for both. There are consumers who are not prepared to go full electric; they want a mild hybrid and don’t want to really think about electric, fine. PHEVs for those who think “That's okay for my daily use, I'm okay using electric,” but when they go to travel, they don't want to have any kind of thinking about electric. And then those who say “No, no, no, EVs are for me.” At the point that we have EVs and ICE at the same price level, that's the goal. That's where demand will be done by the consumer and not us telling them what they need to buy. That's a fundamental change in our U.S. strategy, and I think this is the right approach for the moment.

R: If you had to give a timeline of when you're trying to get that price parity as close to gas in the U.S.?

L: I can tell you today, the EX30 and XC40, you can argue the size, but it’s already there. With the new EX60 coming, we're going to launch at the beginning of next year. Volume-wise it will come to U.S. in the middle of next year. This is going to be the goal. This car will bring this price parity, plus some other features that will reduce uncertainty for people. The car will have a bigger battery, the range will be much bigger than what we have today in our portfolio- it's going to be fantastic, you won't need to charge that much. Because of the battery, we're going to be able to charge much faster, and we’re going to be able to get more miles in less minutes. That's also going to be a key element. 

Again, the consumer will say, “Okay, that is a response for what I need, so I will go to an EV,” or they’ll say, “No, it's still not for me, I’ll go for ICE”, but the price will be more or less equivalent. That, for me, is where we're going to discuss, and no incentives, really, about the market itself. That is where demand and offer will have their capability to talk.

R: How important a role do you think plug-in hybrids are going to continue playing in U.S. sales? I’m a big fan of PHEVs, I think they’re a perfect stepping stone, but from some of our own research, a lot of times consumers don’t understand how they work or they don’t see the benefits.

L: We’ve always considered plug-in hybrid as a bridge. Our plug-in hybrids have always been getting better and better. In the beginning, they offered very few miles per charge; today, we’ve come to a much better PHEV. We're going to have a new development that’s coming that's going to be even better, but it's still phase one: an ICE car with an electric engine (a battery and motor). Phase two, as Håkan detailed: an electric car with a gas backup. This fundamentally changes everything. 

For those consumers excited to be buying a car, that’s the second most important purchase after the house. You don't want to make a mistake, you go to a lease, and you're going to be in that lease for three years. That's the point where people feel unsafe, or they feel PHEV ownership is for them: my daily routine is done using electric power, then, if I'm ready, I'll go to an EV directly. More importantly, based on that analysis, because we are one of the leaders in PHEV sales in the premium segment, we understand the adoption of this technology across the country. By doing this, we're going to ship cars more to where people tend to go more towards this direction (PHEV ownership), instead of spreading these cars across the country and having them all over the place…which then drives me to do bonuses, and we end up with a consumer buying a PHEV that they really don't see the benefits of. It's a bad business for all. So that’s a fundamental change that we are promoting also here in the U.S.

R: Do you have a ballpark of how many Volvo PHEV buyers cross that bridge to full electrification?

L: Interesting question because at the beginning, we thought that it would be a natural transition, right? From gas to PHEV, PHEV to BEV. But no. For EVs, we have the early adopters as the peak…and then we have the valley…and then convincement. The "convincement phase" can be PHEVs or not. On the EV side, people jump directly. In Brazil, we only sell PHEVs and BEVs, we have a very good base for conversation, and I can tell you 70% was directly from ICE to BEV.

R: Wow, just from ICE to BEV?

L: Yeah, jumping directly to that. That 70% were the early adopters. And then it comes the part of convincement because “convince” means “did I have an experience before?”” Did I know how to work this before?” Then PHEVs play a very, very, very important role. That, to me, is where we sit today, especially in the U.S. 

There’s still a lot of lack of knowledge on how to use EV.  I think no one has really occupied this besides the original company (Tesla). They have done a good job…but after them, no one has really occupied the place to say, “Okay, let me explain to you how this works.” So that for me is a gap that exists, and PHEVs come to help…but not that much because you can go in a PHEV and stay in a PHEV for many, many years because for your usage, depending on where you go, maybe there’s no infrastructure, maybe there isn’t charging where you're going to arrive. If you have a house and then you have a beach house or a country house that you normally go to, and you have charging stations at both…then you don't need a PHEV at all because 95% or 98% of your time you are okay. If you don't have this kind of infrastructure, then you feel unsafe, and that's the problem. That’s where a PHEV occupies a good gap that we cannot fulfill with a BEV. 

No matter how many miles we increase (per charge), it’s still an uncertainty because it's a long distance to go and back. That's why it’s so unique for each specific consumer; it makes the job very interesting because, as I said, we need to have a lineup that will serve all Americans. It's a balanced lineup. It’s for your use, we should not try to force a technology if a person is not right for that.

R: Having that flexible offering of powertrains for people.

L: Yes, and very unique. Because if we know consumers from specific regions, like those who live in rural areas or go far away every weekend…EV adoption will be very low, so PHEVs or MHEVs are probably the proper thing. Let’s say it’s a couple and the car they use for their daily routine like getting the kids to school, going into the office very close…then an EV is probably perfect. It's my garage, I have what fits for me, and that’s fine. That's the kind of mentality that I think we need, to stop categorizing people and go more into the functionalities.

SDVs, PHEVs, EVs, EREVs, and more. There are a lot of acronyms to remember and a lot on the horizon to anticipate and look forward to from Volvo as the brand writes its next chapter. Listening to their buyers, bettering the good, and fixing the not-so-good. It’s really quite moving, as Chief Engineering & Technology Officer, Anders Bell, told me, how the term “safety” has evolved in focus and definition beyond meeting structural rigidity requirements, airbags, and ADAS- growing to now include software.

While some automakers turn to outside experts for software development help, Volvo chooses to do so mostly in-house and on a market-by-market basis, rather than sharing one software stack globally due to cybersecurity requirements and marked differences in consumer tastes for various ecosystems. For example, Volvo products in China use Meizu’s Flyme Auto, whereas our stateside lineup makes use of Android Auto Automotive OS.

The early roll-out of the all-electric EX90 was unfortunately plagued by a myriad of software hiccups, glitches, and frustrations, enough to displease patient owners and rush Volvo to develop a fix for the three-row’s software stack as soon as possible. Volvo, leaning in to its storied human-centric aura, acknowledged it dropped the ball, forfeited the trust of some of its vehicle buyers, and is actively working to rebuild that confidence with thorough over-the-air updates that should improve the flagship crossover’s brain. Furthermore, Anders, who spent six years previously at Tesla, and his team collaborated on an even more intimate fix for the EX90 that ditches its outgoing problematic single centralized computer setup with a new, exceptionally more powerful and faster Nvidia Drive AGX Orin-based system dual-configuration. The new hardware is being added to all 2026 MY EX90s and is complementary for all existing 2025 EX90s.

Another fix is the EX90’s upgrade from a 400V architecture to an even more capable, advanced 800V architecture over the span of just one model year. It’s undoubtedly a feat worth recognition and bragging about, but as Anders explained, the EX90 was engineered right from the get-go to be readily updated and enhanced over time as software technology rapidly reengineers itself. “We have a continuous relationship with the car, where we’re looking both updating over-the-air cars going back five years, and at the same time we’re looking at what I want to do in five million cars five years from now”.

Being on the bleeding edge of development and marrying together sustainable energy and electrification with software-defined-vehicles is a coveted combination that Anders is absolutely sure is the most profound technological transformation in the history of the automobile. With these innovations and a software-first mentality, Volvo is in the midst of graduating into both a software company and a car company, which opens up a wide world of new possibilities.

One of those possibilities that I questioned is the concern of data security and privacy as today’s vehicles get more and more connected. Anders touted the value of collecting real-world, real-time insight from a safety perspective; harvesting data captured from what’s happening out on the open road to better Volvo’s ADAS systems. Harken back to the 1970s when engineers would visit crash sites with measuring tapes and page through police reports, this elevated approach to researching accidents is a monumental leap into modernity. Outside of the parameters of sourcing safety-related numbers, Volvo’s investments in ensuring global cybersecurity and data privacy are ongoing and sturdy. “I always say, data safety is also safety,” Anders noted.

After my engaging conversations with top brass at the Swedish automaker and touring this spotless and remarkably efficient plant, it’s clear Volvo is ambitious, proud, and conscious of the challenges and opportunities that lie ahead. The brand’s actions are pragmatic, plans flexible, and diligence to its decades of human-centric behavior and practice couldn’t be more evident.

How Audi Can Reposition Itself as a Leader in the Luxury Space

by Robby DeGraff, Manager of Product and Consumer Insights

The luxury space continues to rapidly evolve as consumer tastes change and brands either retreat altogether or scale back their future electrification ambitions. While some automakers remain committed to EVs, others are instead refocusing on hybridization and ICE. Point the blame at harsh tariffs placed on imported vehicles into the United States, lagging federal incentive support, lingering consumer woes about EV ownership and charging, and consequently slowing sales.

Take Audi, for example. Credited as being one of the first to market with a luxury EV, the e-tron, which launched nearly seven years ago for our 2019 MY, Audi has faced a whirlwind of challenges and is now scaling back on its bold EV plans. The automaker initially pledged to slow the development of future gas-powered vehicles after this year, before a complete halt by 2033. Those targets have since been erased, with Audi announcing it would be making massive changes to its current lineup by way of adding various forms of hybridization and thinning the herd. Audi isn't giving up entirely on EVs, with the current lineup populated with enticing brand-new entrants like the A6 e-tron and Q6 e-tron, and a select few more on the way, including in the format of larger crossover options and reportedly sports cars.

But has the desirability for the upscale brand begun to plummet? Year-over-year sales fell 14% to 196,576 in 2024 compared to 228,550 units in 2023, and Audi's Q2 sales dropped a shocking 19%. The new Q6 e-tron appears to be having a somewhat successful first six months of the year, trailing sales of the lucrative Q5 and Q3 of course, but certainly outpacing sales of all of the brand's other EVs and several ICE products. We'll remain cautiously optimistic on how well this lead lasts.

So what can be done then to fix Audi? Is the brand salvageable and its reputation rebuildable? Is there just too much overlap with similar, more mainstream Volkswagen products?

For decades, Audi has done a commendable job marrying athleticism and luxury across the board, but these efforts seem to have become more reserved. Take a quick look at the new, rather vanilla Q3 and VW's Taos and decide for yourself. Exterior styling is now more subdued, hiding interiors heavily digital and outfitted in questionable materials. The storied German automaker could absolutely learn a thing or two from Hyundai Motor Group's posh arm, Genesis, who undoubtedly executes some of the most hospitable and upscale cabins.

Rewind to the 2000s, and Audi's passion for motorsports was loud and clear, with the TT, coveted RS-badged sedans packing serious power, and of course, the debut of the iconic R8 supercar, which served as the flagship offering. Is it time for Audi to kick it into gear again and lean in on its enthusiast roots more confidently? Probably. Sales of the hot but aging RS 6 Avant wagon, with its exhilarating twin-turbo V8, have jumped 41% this year already. The brand's catalogue of powertrains seems to be just kind of "coasting" from an engineering standpoint, while Mercedes-Benz and BMW engineers pull ahead with propulsion that's not just efficient, electrified, and engaging to drive, but exciting to buy and not numb. Looking at AutoPacific's newest 2025 Future Attribute Demand Study, nearly half of future Audi brand considerers are interested in either an on-road performance package (upgraded suspension, more horsepower, beefier brakes, etc.) and/or a sport appearance package that's strictly styling-focused.

Could Audi dip its toes into the popular rugged scene and launch a dedicated "Quattro" subbrand of soft-off-roaders? That's a strong possibility, too. BMW's slowly explored that strategy with its latest X5, and Lexus answered the demand via its Overtrail overlanding trims for the GX and LX.

Another draw to luxury shoppers that's simply missing at Audi is the availability of intimate, personalized customization. Mercedes-Benz, BMW, Porsche, of course, and now more recently: Cadillac, all provide consumers a chance to further design and tailor their newly purchased vehicle through expansive paint palettes and interior upholstery choices, intriguing wheel designs, and more. Audi's three-row Q7, for example, lets buyers pick from just eight paint colors, half of them a shade of silver, gray, or white. BMW's X7 offers 16, including many optional premium hues the automaker can cash in on. Again, emphasizing individuality and in return, making their products highly desirable. AutoPacific’s latest 2025 Future Attribute Demand Study data show that over 47% of Audi considerers would pay a premium for special exterior paint colors. Clearly, there is opportunity here

None of this work can, or quite frankly should, get done until Audi navigates the ongoing tariff fiasco that's plagued the industry and sets up shop stateside. Recall, Audi imports many of its best sellers from factories in Mexico, Hungary, and Slovakia. Recent whispers have suggested Audi has $4.6 billion for a new plant. Alternatives could include utilizing space at Volkswagen's sprawling plant in Chattanooga, Tennessee, where there's unfilled capacity, or at the upcoming Scout plant in Columbia, South Carolina, ready to go live in 2027.

There's a lot of work to be done. The brand needs a full, healthy revamp, and if it doesn't arrive soon, Audi may fall behind.

Qualcomm Shows the Auto Industry the Way Forward

By Ed Kim, President and Chief Analyst

Here at AutoPacific, we can't stress enough the degree and the speed at which the automotive and tech industries are converging, and just how significant and game-changing this ongoing development is. Like it or not, the modern automobile is a highly complex suite of computers on four wheels, and just about every touch point in a modern automobile is increasingly defined by technology. As such, names like Qualcomm, which was previously known for its massive contributions to wireless technologies and semiconductors, have become crucially important in the automotive supplier world. Today, over 350 million vehicles roaming the world's roads now use Qualcomm's Snapdragon hardware and software to bring together ADAS and autonomous drive integration, the cockpit experience, and cloud connectivity.

Qualcomm had several major announcements at the IAA Mobility Show in Munich, Germany that AutoPacific attended last week, and all of them reflected just how much Qualcomm, and tech in general, are integral to the automotive experiences of today. Qualcomm's splashiest announcement was made jointly with BMW with the unveiling of the new iX3 all-electric SUV, which is the first of BMW's new "Neue Klasse" generation of vehicles. The new AI-enabled Snapdragon Ride Pilot Automated Driving System uses Qualcomm's Snapdragon Ride SoC (which in the tech world means "System on Chip", not "State of Charge") and an autonomous drive software stack jointly developed by Qualcomm and BMW. 

This system is fully scalable and is capable of up to Level 2+ automated hands-off/eyes-on highway and city driving (like Tesla's misnomered Full Self Driving). It even offers features like lane changes initiated by mirror glances or steering wheel tugs, and the whole system is enhanced by both on-board and cloud-based AI. While developed with BMW, the system is available to all OEMs and Tier 1 suppliers. It will make its way throughout BMW's Neue Klasse lineup, of course.

2027 BMW iX3 with Qualcomm's Snapdragon Ride Pilot

BMW rival Mercedes-Benz announced with Qualcomm at IAA Mobility that the Snapdragon Cockpit and Connectivity platforms, both part of the Snapdragon Digital Chassis suite of automotive technologies, are integral to the new Mercedes-Benz MBUX (Mercedes-Benz User Experience) infotainment. The system, which debuts in the new all-electric GLC-Class and the electric or gasoline-powered CLA-Class, boasts AI-boosted experiences for more personalized drive experiences, and the Snapdragon Cockpit hardware enables gorgeous graphics and animation across pillar-to-pillar screen configurations. Snapdragon Connectivity allows fast 5G data transfers.

2027 Mercedes-Benz GLC with EQ Technology with user experience powered by Snapdragon Cockpit and Connectivity platforms

Qualcomm and Google also announced they are collaborating deeper than ever before to bring AI user experiences to the driver. Snapdragon hardware and software along with Google Gemini utilize both on-board and cloud-based AI to provide the best possible personalized experiences for the driver that evolve to become even better over time. This doesn't necessarily mean Google-branded in-cockpit experiences; automakers can brand their experiences any way they want, and they are not required to use Google or Gemini branding. With this, automakers using Snapdragon elements can be prepared for future AI developments for fast deployment - essential in a tech world that moves much faster than the automotive world traditionally does - as well as allowing for vehicle customers to enjoy advancements in AI over the course of their ownership cycles.

Qualcomm and Google announced an increasing commitment to AI-enabled user experiences

Speaking of speed, Qualcomm and noted automotive supplier Valeo used the IAA Mobility show to announce pre-bundled ADAS and autonomous drive solutions using the suite of Snapdragon Ride Pilot SoCs and software stacks and Valeo's sensors and ECUs. Snapdragon Ride Pilot is capable of integrating ADAS and autonomous drive hardware from any number of suppliers, but this collaboration with Valeo offers automakers validated and production-ready ADAS/autonomous drive packages that can drastically reduce automakers' development times.

Qualcomm and Valeo announced pre-bundled production-ready ADAS/autonomous drive packages of hardware and software to reduce production times - increasingly important at a time when the auto industry is under pressure to drastically shorten development cycle times.

In fact, speed seems to be a recurring theme at Qualcomm, in talking to several key executives during IAA Mobility. As alluded to earlier, the tech world moves at a much faster pace than the traditional auto industry, and given how engrained technology has become in the automobiles of today and tomorrow, the tech industry has been forcing the auto industry to speed up development times as well. Consumers are accustomed to the speed of change and advancement in their personal hand-held technologies, and those expectations are carrying over to their expectations for their in-vehicle experiences, whether related to the cockpit or advanced driving assistant technologies. 

Make no mistake: the tech industry will continue to have an increasingly outsized and integral role in automotive, and those having trouble adapting will get left behind.

Why PHEV Shoppers Actually Want EREVs Instead

By Deborah Grieb, Director of Marketing and Insights

Plug-in hybrids in general have been a tough sell, partly because after all these years, their benefits are hard for many consumers to understand, and people tend not to spend lots of money on things they don’t understand.

While plug-in hybrids have only seen mild success, a new type of plug-in hybrid is about to hit showrooms. Extended Range Electric Vehicles (EREVs) provide the driver with much more all-electric range, typically well over 100 miles, than traditional PHEVs, which typically can drive about 25-50 miles on electricity alone. For both types of PHEVs, once the battery is discharged, a gasoline engine turns on to keep the vehicle moving - to oversimplify things a bit. Unlike pure battery EVs, there is no range anxiety in either type of PHEV because of their gasoline engines.

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While plug-in hybrid demand is modest overall - with only 8% of new vehicle shoppers saying they want a PHEV as their next vehicle - over half of PHEV shoppers (55%) would prefer an EREV over a traditional PHEV, even with an associated price premium.

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Some key differences with EREV intenders compared to traditional PHEV intenders include being much more likely to be women (47% vs. 36%), and they’re much more likely to own their own single detached home (54% vs. 42%). The perceived safety and security afforded by EREVs’ longer all-electric range may be appealing to some women, and EREVs’ large battery packs are better and more conveniently serviced with a charger at home, which is usually only possible to have with detached single-family home ownership.

In addition, EREV intenders are much more likely than traditional PHEV intenders to do long-distance road trips, drive on freeways regularly, drive in stop-and-go traffic regularly, and commute to work or school. Thus, there is definitely a segment of new vehicle shoppers for whom EREVs may address their needs well. The big problem will be the same as for traditional PHEVs: can automakers successfully explain the benefits of EREVs to consumers? That, and pricing, will ultimately determine their success and relevance in the U.S. market.

Nissan’s Long and Winding Road to Hybrids in North America

By Ed Kim, President and Chief Analyst

Fifteen years ago, in 2010, Nissan launched the world’s first mass-produced electric vehicle, the Leaf. Until the 2023 model year when the Ariya crossover launched, the Leaf remained Nissan’s only electric vehicle sold in the U.S. market, while Tesla and a myriad of legacy automakers and startups eagerly jumped into the EV market themselves. Worse yet, in North America Nissan was largely absent from the growing hybrid market aside from some half-baked, long-forgotten efforts that sold in minuscule volumes such as the Pathfinder Hybrid and Murano Hybrid.

Today, the EV market in the U.S. is at a crossroads in the U.S. market due to the current administration’s decision to pull popular tax credits that helped address their affordability, alongside wavering consumer interest. However, consumer adoption of hybrids has been progressively strong with automakers like Toyota, Honda, and Hyundai Motor Group aggressively implanting them in their high-volume models, increasingly as standard equipment in Toyota’s case. Today’s hybrids provide the huge consumer benefit of massively improved fuel economy with only a modest price walk, and they do not require any of the behavioral changes that are required to operate EVs, such as learning the ins and outs of EV charging or keeping tabs on range.

Unfortunately for Nissan and its Infiniti luxury outlet, hybrids have been missing from their current North American product portfolios at a time when the automaker’s direct competitors are attracting throngs of customers who are enticed by the massive fuel savings of hybrid powertrains. In the case of Nissan’s Rogue, its highest volume model, sales declined to about 246,000 units in 2024, down from a peak of about 373,000 units in 2017. That’s an astounding 34% drop in sales during that time period, starkly contrasted by the Toyota RAV4 and Honda CR-V, Rogue’s two biggest competitors, which grew their sales over that same time period - in a declining new vehicle market no less - by 16% and 7%, respectively, due in no small part to the availability of hybrid powertrains.

Despite its lack of North American hybrids, Nissan does have a full hybrid powertrain sold outside of North America called “e-Power”. This is a series-hybrid powertrain where the gasoline engine only functions to keep the small battery pack charged; there is no direct mechanical connection between the gasoline engine and the wheels. Rather, it’s the electric motor (powered by the battery which in turn is charged by the gasoline engine) that sends power to the wheels.

So, why isn’t e-Power offered here in the U.S. market? It’s a combination of e-Power’s technical characteristics and overestimating EV demand in the U.S. market. To the latter point, Nissan executives revealed that the original plan for the U.S. market was to bypass hybrids and go straight to EVs. However, as EV adoption was slower than expected, Nissan has ended up selling far fewer EVs up to this point than it had hoped, and it hasn’t had hybrids to sell to Americans either.

To the former point, various staff at Nissan have explained to us that e-Power in its first and second generations was designed specifically for Asia and Europe, where very low-speed city driving is the norm and drivers spend less time on long high-speed highway trips compared to Americans. This means less-than-optimal highway fuel economy in North American driving conditions.

As I spent this past summer working in the UK, Nissan graciously loaned me a Qashqai e-Power for an extended week-long test. The vast majority of my time with the Qashqai, a compact crossover about the size of a Toyota Corolla Cross or Volkswagen Taos, was on high-speed motorways (as we do in the U.S.), traversing southwest England and a bit of Wales. The Qashqai itself proved itself to be a really nice piece with a more upscale interior than we typically see in North American Nissan products (cloth-covered A-pillars, Infiniti-grade semi-aniline leather, and even massaging front seats). It was quiet at speed, plenty spacious, and swallowed all our luggage without a hitch. It was a prime example of why compact crossovers are so popular.

The second-generation e-Power hybrid powertrain, which our Qashqai had, worked well in European city environments. The speed limit in most UK cities is 30 mph, and up to those speeds, the Qashqai behaved almost like an EV as the engine tended to remain off most of the time. The EV-like one- pedal drive mode added further to the EV-like drive experience. However, cruising down motorways at 70 to 75 mpg saw the turbocharged three-cylinder gasoline generator working overtime, and I typically saw highway fuel economy in the low-to-mid 30 U.S. mpg range. Not terrible, but not particularly impressive either. A couple weeks earlier, I had rented a purely gasoline-powered Skoda Karoq, a direct competitor to the Qashqai in size and format, with a 1.0L turbocharged three-cylinder engine. The Karoq netted me highway fuel economy in the low 40 U.S. mpg range without the additional cost and complexity of a hybrid powertrain.

This experience demonstrated why the second-generation e-Power hybrid would have likely been uncompetitive in the U.S. market. However, back in March, I got to drive both the second and the latest third-generation e-Power applications on a closed test track in Japan and was very impressed with the quiet refinement of the new third generation, though the jury’s still out as to its fuel economy in American driving conditions.

Nissan’s third-generation e-Power has been thoroughly re-engineered to work well in American driving conditions, but it is still about two years away from debuting in on U.S. soil in the next- generation Rogue. Regardless, it cannot get here soon enough. Furthermore, Nissan is also developing a more traditional parallel-hybrid powertrain for its larger vehicles including Pathfinder, Murano, and Infiniti QX60. That will arrive after e-Power does.

What’s clear is Nissan needed hybrids years ago, and they can’t arrive in the U.S. soon enough. The second-generation e-Power wasn’t suited to American driving, and overestimating EV demand left Nissan flat-footed as hybrids took off. Now, with mounting financial strain and a string of canceled EV projects, the absence of hybrids is a mission-critical obstacle to recovery. Nissan must deliver competitive systems in the right segments — and quickly — to prove the wait was worth it or risk falling even further behind.

Expiring Federal Tax Credit for EV Purchases Will Dampen EV Adoption

by Ed Kim, President and Chief Analyst

Our latest data and forecast EV sales reveal the considerable impact of the upcoming elimination of the Federal tax credit. The recent passing of H.R.1, the One Big Beautiful Bill Act of 2025, includes the elimination of the Biden-era Federal tax credit for EV purchases and leases that can currently save the consumer up to $7,500 off the purchase price of a full battery electric vehicle, plug-in hybrid vehicle, or hydrogen fuel cell vehicle. The impact of the repeal, which goes into effect after September 30, will no doubt be consequential as it effectively raises the cost of EVs significantly, making them less affordable to many interested shoppers.

Data from AutoPacific’s newly released 2025 Future Vehicle Planner show that about a third of new vehicle shoppers who would consider an EV as their next vehicle say that they are very aware of the tax credit and would buy or lease a new EV because of the tax credit. This represents a 2%-point increase over 2024. Furthermore, awareness of the soon-to-expire tax credit is greater than last year, with 79% of EV considerers in 2025 saying they are aware of the tax credit, compared to 75% in 2024.

The elimination of the tax credit comes at a particularly unfortunate time for the upcoming wave of what were to be affordable EVs. AutoPacific’s Future Vehicle Planner data have shown year after year that affordability is one of the biggest barriers to EV adoption, with 32% of EV rejectors in 2025 saying the cost to purchase or lease an EV is too expensive and 35% saying lower vehicle prices would make them reconsider. Automakers responded to this with a spate of affordable EV models launching over the next few years, but unfortunately, these models will no longer benefit from the tax credit, and most if not all of them will also be impacted by tariffs either on the vehicles themselves, or their parts and materials.

As such, we expect EV adoption rates to flatten considerably as the price of entry into the EV market increases by as much as $7,500 just on the elimination of the tax credit alone, even without accounting for other increased costs stemming from recently imposed tariffs on imported vehicles, parts, and raw materials. The EV market in the U.S. is headed for a rough patch with market share growth stalled due to multiple factors related to lack of affordability. Consumer awareness of the Federal tax credit for EV purchases and leases as well as intent to buy an EV because of it have grown since 2024, but consumers interested in one will soon find them significantly less affordable.

AutoPacific’s Sales Forecast Service’s newly updated U.S. EV forecast calls for 8% EV market share in 2025 and 2026, the same as in 2024. Without continued tax credits, we now expect EVs to reach about 12% market share in 2029, significantly down from our EV forecast from a year ago of 25% market share by 2029. Consumers who are interested in acquiring a new EV may do well to start shopping soon, before the Federal tax credit expires after September 30.

Our Newest Future Attribute Demand Study (FADS) Shows Increase in Demand for Autonomous Driving and ADAS Features

By Deborah Grieb, Director of Marketing and Insights; Ed Kim, President and Chief Analyst

The results of AutoPacific’s 2025 Future Vehicle Planner are in with preliminary data showing some large changes in demand for many features, including higher demand for some autonomous driving and ADAS features over 2024 results. Our Future Vehicle Planner, a respected source widely used by automotive product planners, marketers and technology development teams, contains both the Future Attribute Demand Study (FADS) and the EV Consumer Insights Study. Now in its 4th year, the study surveys licensed drivers ages 18 and older in the U.S. who intend to acquire a new, not used, vehicle within the next 3 years.

With responses from nearly 18,000 new vehicle intenders, the 2025 Future Vehicle Planner has AutoPacific’s largest sample to date for this study and covers a multitude of new vehicle characteristics, as well as extensive psychographics and demographics, to help automakers and suppliers make informed vehicle and product decisions.

Top Wanted Features Include Autonomy, Advanced Driver Assistance Systems (ADAS)

The most wanted feature for 2025 with demand from 43% of new vehicle intenders is hands-off semi-autonomous driving for highway use only with driver attention required, with in-market examples including GM’s Super Cruise and Ford’s BlueCruise. While there are levels of autonomy higher than this, demand for the feature increased 20%pts over 2024, speaking volumes about the future direction of features that allow the vehicle to take more control of driving.

Tied for first, also with demand from 43% of consumers, is a more common ADAS feature, rear automatic emergency braking. Falling into the Driver Assistance category, this feature is defined in the survey as, “when approaching an obstacle while reversing, the system will alert the driver while braking the vehicle to prevent moving further rearward and colliding with the obstacle.” Having become more commonplace in both mainstream and luxury vehicles, consumers have had more opportunities to experience the real safety benefits of helping avoid rearward collisions with passing vehicles or pedestrians.

Six other autonomous driving and driver assistance features make the top 15 most wanted features in 2025, including: adaptive cruise control with active lane centering AND stop and go, lane change assist, hands-off, fully-autonomous driving for all speeds to a pre-specified destination with no steering wheel and NO option to manually drive the vehicle, rear cross-traffic alert with automatic emergency braking, emergency evasive steering assist, and hands-off, fully-autonomous highway and city driving to a pre-specified destination with option to still drive the vehicle when desired, driver attention NOT required.

Whether for Convenience or Safety, New Vehicle Intenders Have More Trust in Autonomy

AutoPacific’s research has shown that autonomous driving and ADAS features have struggled to capture strong demand from new vehicle intenders over the past couple of years primarily due to unproven technology and lack of consumer comfort with their vehicle having control over situations. It seems the tune has shifted as some technologies become more prominent in new vehicles and consumers gain experience and confidence in them. 2025 data show an increase in the percentage of new vehicle intenders overall who say they “trust advanced car safety systems that prevent accidents automatically,” as well as those who agree with the statement, “I want my vehicle to be able to safety drive itself so I can do other things (read, watch movies, work, etc.).”

A younger future vehicle buyer is also a major factor as our data over the years has shown that Generation Y and Z consumers have higher comfort with autonomous driving and ADAS features and also higher demand. The median respondent age for the 2025 Future Vehicle Planner is 39, compared to 44 in 2024. As younger generations continue to enter the new vehicle market, they bring more knowledge of technology and enthusiasm for having it in their vehicle.

Despite fully-autonomous driving capability not yet being applied in commercially available passenger vehicles, consumers are starting to be able to experience the technology at varying levels through robotaxis in a few metropolitan areas, and in certain environments such as industrial parks and tourist attractions. With a global autonomous vehicle race underway, we believe increased consumer demand and confidence are great news for the U.S. market.

New Must-Have vs Nice-to-Have Exercise Reveals Top Demanded Features Can Make or Break the Deal

New to the study in 2025, AutoPacific asks respondents if the features they say they want are must-haves, meaning they won’t buy a vehicle without it, or nice-to-have and could be sacrificed due to price or availability. Preliminary data reveals all-wheel drive, blind spot cameras, power front driver’s seat, parking sensors for the front and rear, and wireless Apple CarPlay/Android Auto are most likely to make or break the deal with greater than 60% of respondents who want those features saying they are must-haves. These are commonly available and popular features with high installation rates in modern vehicles.

But new and emerging features with strong appeal are by their nature not common yet, and many of them are less likely to be “must-haves” despite strong consumer demand. This explains why hands-off semi-autonomous driving for highway use only with driver attention required, the top demanded feature overall, is only a must-have for 33% of consumers. Great new ideas can be very appealing to consumers, but until they are commonplace, consumers are less likely to insist on having those new features in their next vehicles. Automakers that offer such highly demanded but uncommon features stand to have a competitive edge over their competition.