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.

As Affordability Woes Rise, Budget-Conscious Vehicle Shoppers Want to Keep it Simple

by Robby DeGraff, Manager of Product and Consumer Insights; Ed Kim, PResident and Chief Analyst

Summer is here and the automotive industry continues to be caught in the middle of chaos, fending off rare-earth minerals shortages for parts, ever-changing tariff guidance on imported vehicles and parts that necessitate relocating production locations, general inflation, and punishingly high interest rates. It’s not the easiest time to be a consumer shopping for a new vehicle. To combat these threats, automakers may need to get creative by streamlining their current offerings and do whatever it takes to keep affordability in check.

Whether it be trading automatic climate control for manual operation or leather-wrapped steering wheel for a polyurethane material, we’ve seen examples of de-contenting and packaging shuffling before. Tesla recently moved forward on previously announced plans to offer a base Cybertruck that eliminated almost $10,000 worth of standard equipment, swapping AWD for a RWD footprint and leather for cloth seats, removing a rear touchscreen, and downsizing from 20-inch to 18-inch wheels, amongst other adjustments. Both Mazda and Hyundai have added or reintroduced new entry-level trims, while MINI on the other hand occasionally offers a limited-release, value-focused Oxford Edition for its Cooper family, bundling together desirable features and unique styling elements at an MSRP oftentimes thousands of dollars less than the nameplate’s existing base trim.

Basic, Less-Extravagant Features are “In”

As average new vehicle transaction prices climb closer to that $50,000 ceiling, automakers need to ensure there’s product available for consumers who want to stay out of the used market yet spend as little as possible in the new one. Data from AutoPacific’s syndicated Future Attribute Demand Study (FADS) which surveyed over 14,000 new vehicle intenders about their interest in more than 160 features and technologies, gives us a clear idea of what matters to those shoppers who plan to spend less than $35,000 on their next new vehicle: simplicity. Upgrades like nicer, plusher seat upholstery choices, flashy exterior styling enhancements, and more immersive cabin technology just aren’t as desirable amongst these shoppers who would rather keep their monthly payments low and their vehicles sensibly equipped.

At the same time, even though many of these listed features lack strong demand, they’re commonly found on popular vehicles that carry MSRPs within that coveted $25k-$35k price bracket.

Front wheel drive, base stereos, cloth seats with various manual adjustment, and analog gauges are “in,” for these more frugal shoppers, so the array of standard equipment found on entry- and mid-level trims of today’s popular vehicles within the $25,000 to $35,000 price range may need to be reexamined as consumers tighten their belts in the face of economic uncertainty.

Several must-have features could likely be removed to lower a vehicle’s total cost and consequently better match the more limited budgets and needs of those active in this particular price bracket.

It’s no surprise that most of top ten most-wanted features amongst vehicle shoppers planning to spend between $25k-$35k are nearly identical to those of shoppers planning to spend north of $35k, however, there are clear differences in prioritization and demand for some. For example, 34% of $25k-$35k vehicle shoppers want a sunroof/moonroof (ranking it their 6th most-wanted item), whereas $35k+ vehicle shoppers have a greater interest in things like driver profile settings, a household 110v outlet, and even sunshades for rear passengers.

While there’s a starker difference in demand for numerous comfort and convenience features between these two price brackets, data show that demand for common safety features, both passive (like parking sensors front and rear at 29% vs 32%, respectively) and active (rear cross traffic alert with automatic emergency braking at 30% vs 32%, respectively), is relatively similar. However, when it comes to driver assist features that allow the vehicle to take on more driving tasks, those $25k-$35k buyers are definitely not as interested in these costlier, more advanced technologies as those planning to spend more than $35k. For example, $25k-$35k vehicle shoppers are 6%-7% pts less interested in adaptive cruise control with active lane centering, regardless of if it has stop-and-go functionality. 

What is the Ideal $25k-$35k Vehicle and Who Would Buy it?

With unique needs, wants, and priorities, just who might be the typical $25k-$35k vehicle buyer and what might that $25k-$35k vehicle look like?

Per AutoPacific data, many shoppers in the $25k-$35k price bracket are more open to sedans compared to shoppers looking to spend over $35k due to their greater affordability, and they’re more likely to want a tried-and-true gasoline engine. Note that while 88% of these new vehicle intenders currently own an internal combustion engine vehicle, 20% want their new $25k-$35k vehicle to be hybridized, and only about 5% want it to be fully electric. For more than a third of these buyers (35%), this will be the first time they have ever purchased or leased a new vehicle, upgrading from their current vehicle that’s, on average, more than 11 years old. 

On the outside, their ideal $25k-$35k vehicle doesn’t have flashy exterior enhancements like LED welcome lighting, illuminated brand logos, or an expansive glass roof. On the inside, the cabin is likely upholstered in cloth, with manual adjustment for the seats, a cabin layout that prioritizes practicality over design with more buttons and rotary dial controls, and an analog gauge cluster next to a modestly-sized center touchscreen that doesn’t have embedded factory navigation. Despite a more restricted budget, buyers of this $25k-$35k vehicle still want several of the popular features and technology found on higher-priced vehicles including wireless charging pads for smartphones, heated and ventilated front seats, a common 110v outlet, driver profile settings, and active safety features like rear cross-traffic alert with automatic emergency braking, rearward automatic emergency braking, lane change assist, and rain-sensing windshield wipers. Features like a head-up display or upgraded branded stereos (Bose, Harman Kardon, etc.) aren’t necessary, nor are immersive connected services that require an additional paid data plan to use.

These buyers have a median household income of $50,000, live in the suburbs, have no children in their households, and are either Millennials (31%) or Baby Boomers (29%), many of the latter taking into account their fixed incomes. 57% are women. They drive less than 20 miles per day and intend to use their $25k-$35k vehicle for tasks like commuting, longer road trips, relaxed/pleasure driving, and highway driving. A third lug around their pet(s) and an adult front-seat passenger, but don’t plan on using their backseat as frequently. Generally, these buyers are a bit more conservative and humble. While more than 60% do want their $25k-$35k vehicle to come equipped with technology to help prevent careless driving mistakes, there’s less interest in various ADAS systems compare to those planning to spend more than $35k.

While automakers can — and should — continue to offer upgraded and aspirational features, amenities, materials, and technology even on more budget-focused products, it’s important to ensure the availability of sensible, modestly equipped versions of these vehicles during these times. Maintaining a persistent focus on delivering value to entry-level shoppers is paramount, especially if an automaker wants to create, build, and retain a relationship when that entry-level buyer in time decides to jump up to the next price bracket when shopping.

It’s good for models in that price range to offer some fancier, lower-demand features, but those should be optional and limited to higher trim levels, which can also serve to capture customers of bigger and nicely-equipped models who may be downsizing into more affordable segments as they tighten their belts.

Exclusive Insights from Our Interview with Qualcomm's Anushman Saxena

by Ed Kim, President and Chief Analyst

Automakers and the automotive supplier community have traditionally excelled in designing and engineering vehicles and their mechanical components. However, over the last decade and a half, the automotive industry has become inextricably linked to the tech world, as many of the latest innovations are outside the traditional realm of powertrains, chassis, and design. An automaker’s success today is heavily dependent on the ability to bring tech innovations to market in ways that are relevant to today’s new vehicle consumer.

Qualcomm, a company more associated with wireless technology and smartphone chipsets than automotive products, has quietly become a hugely important player in the automotive supplier space with its Snapdragon System on Chip (SoC) products being adapted for automotive, allowing the seamless integration of digital cockpits, infotainment, and ADAS features into the latest vehicles.  I had the opportunity to sit down with Anshuman Saxena, VP and Head of ADAS/Autonomous Driving Products at Qualcomm, to get further insights.

Saxena and the Snapdragon team have been discussing at length how to address affordability. Its new Snapdragon Ride Flex product, which combines the processing of ADAS and cockpit functions onto a single chip (instead of multiple chips) to significantly reduce costs, is designed to help address this.

Consistent with data from AutoPacific’s syndicated Future Attribute Demand Study (FADS), Saxena says that younger consumers expect advanced technology in new vehicles today, regardless of price point. Young consumers have grown up with technology as a given in their lives, so the traditional model of waiting to have the “cool stuff” until they have reached a certain level of financial success later in life does not apply anymore.

A 16-year-old owns and uses the same iPhone as the wealthiest CEO, so young people expect to have the latest technologies in vehicles they can afford. Quips Saxena, “And why would they not want to have features that cars like Tesla have?”

Snapdragon Ride Flex, with its single SoC, helps address this. “The Flex…has better cost affordability because you are packing everything into a single computer, improving the experience,” as well as addressing cost, according to Saxena. However, Saxena believes that above all, safety is the most important attribute that Snapdragon must bring to the table.

Saxena says, “Safety cannot be compromised. Safety is the most critical thing in anything we do, and comfort level functions start becoming (a second) value add that consumers would want to use, and then the third important thing is user experience.”

In other words, comfort and user experience are of supreme importance; however, Snapdragon’s technologies must, above all else, integrate and process various inputs (such as ADAS and cockpit features) in a way that ensures the safe and reliable operation of these technologies. With numerous high-profile real-world mishaps involving ADAS and semi-autonomous driving features over the last few years, proven safety is of paramount importance to both automakers and consumers alike.

Perhaps not surprisingly, China is the big rollout market for Flex. As Saxena says, “Where do you see a lot more democratization of these (technologies)? You…see it in China first, right? Our Flex take rate is going to be much higher in China (because) cost is a big driver, and speed is a big driver. So that will drive the phenomena which will come in the rest of the world…but yes, we will see more in China to start.”

At the moment, Saxena sees Level 2+ (supervised eyes-on hands-free driving such as Tesla’s FSD or BYD’s God’s Eye) as the main focus for autonomous drive features for the foreseeable future as Level 3 (eyes-off, hands-off) requires extensive validation, redundancy, and safety mechanisms.

However, Saxena says that Snapdragon hardware is very much ready for Level 3. “Our hardware is designed for the highest level of safety requirements; we have built our software to those requirements,” says Saxena. However, he also notes that achieving Level 3 autonomy to work safely and reliably is more about validation, testing, and redundancy at the OEM level than it is about the Snapdragon hardware itself.

Going forward, Saxena anticipates a gradual evolution of autonomous driving technologies for privately owned vehicles (as opposed to robotaxis) and a continued industry focus on enhancing safety and the user experience. He also believes that China will continue to lead in the early adoption of advanced ADAS technologies, as evidenced by the sheer number of L2+ semi-autonomous systems already on sale there, meaning that L3 autonomy is likely closer. In North America and Europe, however, L3 is “probably later, towards 2030 or even later, and maybe 5% max of total sales” for the foreseeable future, according to Saxena.

One thing is certain: while Qualcomm and its Snapdragon SoC systems are less known in the traditional automotive space, that is changing rapidly as its technologies and solutions are firmly geared towards the future of automotive innovation.

The fusion of the automotive and tech industries in recent years has yielded some of the most groundbreaking innovations in the automotive space in decades, and tech suppliers like Qualcomm will be among the most important in delivering the innovations that today’s new vehicle shoppers want.

Fresh Survey Data Reveals How Tariffs May Impact New Vehicle Buyers

by Deborah Grieb, Director of Marketing and Consumer Insights

The automotive industry is entering a time of significant change due to the enactment of tariffs that will affect vehicle pricing and production, sales volumes, and more. A new survey finds that consumers are in fact concerned about the effect of implemented tariffs on the cost of living and the economy, and many intend to make some changes to their future big purchase plans. The survey of nearly 2,000 U.S. residents ages 18 and older specifically sheds light into the impact of tariffs on vehicle purchase plans, revealing that 75% of respondents who said they plan to purchase a vehicle within the next year will change those plans in some way, whether it be choosing a cheaper vehicle or waiting until things are more stable, if vehicle prices rise.

When we asked about planned major purchases within the next year, 80% of respondents said they plan some type of large financial commitment, with vacations being the most likely purchase (44%), followed by home renovations (34%), hobbies (33%) and a vehicle purchase (33%). Of those 33% who are planning a vehicle purchase, 59% intend to purchase a new vehicle, 27% plan used and 14% are currently unsure. The big question for the automotive industry: how might those plans change if vehicle prices rise due to tariffs?

While rising vehicle prices are likely to have a negative effect on U.S. new vehicle sales, not everyone will be leaving the market. We believe many still plan to make that purchase but have changed their expectations – some will simply pay more, some will choose something cheaper.

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Source: AutoPacific Tariffs and Vehicles survey, March 2025

But the real concern is the potential of movement to the used car market and purchase delays, both resulting in reduced new vehicle sales. The study reveals that 20% of those intending to purchase a new vehicle will consider buying used instead of new and 23% may wait to purchase a vehicle until things are more stable.

Consumers leaving the new vehicle market, even temporarily, would lead to devastating blows to the automotive industry, but there are options for consumers, automakers and finance companies that could keep new vehicle intenders in the market.

According to Experian, the average term for new car loans is 68 months, yet 15% of new vehicle intenders say they may choose to finance for a longer term to keep their monthly payment down, and 16% may shift to leasing instead of buying if they can get a good deal. Even among those who said they will wait to purchase a vehicle until things are more stable, 20% are open to leasing instead of buying, 14% are open to financing for a longer term, and 27% may choose the same vehicle they planned, but with fewer features and options. It’s also notable that 16% of new vehicle intenders said they would buy a vehicle sooner than originally planned to avoid rising costs.

Despite the Threat of Tariffs, Many New Vehicle Intenders Are Willing to Pay More…but How Much More?

There are significant numbers of new vehicle intenders who simply expect to pay more for their vehicle than originally planned, or who will finance more than planned. For those new vehicle intenders who said they will pay more than originally planned, more than half (52%) say they’ll pay $3,000-$5,000 more. For those who will finance more than originally planned, 54% will pay less than $125 per month more, with the majority (20%) saying they’ll only pay between $100-$124 more per month.

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Political Leanings Don’t Impact Concerns About a Recession or Rising Costs of Everyday Goods

Republican and Democrat respondents alike say they are familiar with how tariffs work, 90% and 92% respectively, but Republican respondents are less likely to be concerned about rising costs having an impact on them personally than Democrat respondents. However, both respondent groups worry about rising costs of living and an economic recession being in their future, with the biggest concern being the higher price of everyday goods, like food, gas, etc. Republican respondents’ concerns tend to be less intense overall, being less likely to say “very concerned” to all presented scenarios and more likely to say “somewhat concerned.” Republican respondents are also less likely to change their vehicle purchase plans with 31% saying rising vehicle prices as a result of tariffs will not affect their vehicle purchase plans, compared to 21% of Democrat respondents.

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Older Consumers are the Least Concerned about Tariffs

Interestingly, the older consumer groups surveyed, those age 60 and older, as well as those who are retired, have the least concern about tariffs personally affecting them. As most older consumers have likely paid off their mortgage and possibly their vehicle loan, only 39% are concerned about paying their monthly mortgage or rent compared to 73% of respondents ages 18-29. Similarly, only 24% of respondents ages 70 and older are concerned about paying their monthly vehicle loan compared to 64% of respondents ages 18-29. However, the likelihood that older respondents are on a fixed income may contribute to their concerns about the rising cost of everyday goods and an economic recession; both concerns they have in common with the younger respondents.

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Consumer Familiarity is Key to Demand for Advanced Driver-Assistance Systems (ADAS)

by Robby DeGraff, Manager of Product and Consumer Insights; DEborah grieb, director of marketing and insights

‘AutoPacific’s Future Attribute Demand Study (FADS) measures consumer demand for 163 features, including 13 ADAS features such as Emergency Evasive Steering Assist and Unresponsive Driver Stop Assist. When looking at consumer demand for these features over the past few years, AutoPacific has noticed that demand has become quite stagnant, which begs the questions, why and what can automakers do to increase this demand? To answer these questions, we reached out to over 500 current vehicle owners and asked about their familiarity and experience with various ADAS safety features, as well as their interest in having these features in their next new vehicle. As is the case with many of today’s popular infotainment and convenience features, awareness and first-hand experience using various ADAS safety technology was found to result in a greater interest rate amongst consumers.

In this new short survey fielded in February 2025, AutoPacific presented 19 different ADAS features and their definitions to current vehicle owners ages 18 and older to gauge their interest, familiarity, and perception of these advanced systems. While real-world usage may be limited, there is strong awareness and consequently strong demand for many of these more advanced ADAS features. Some premium ADAS features, like Automatic Lane Change Assist, are often reserved and found on more costly upscale vehicles, while the remaining features surveyed are readily available across the industry at all price points.

Demand for ADAS Features Dependent on Awareness Moreso than Experience

There’s a marked difference in consumer awareness of an ADAS feature and actual real-world usage. While this is especially true for certain ADAS features that are relatively new and less accessible due to their pricing or availability at time of purchase, a lack of real-world usage of a well-known ADAS feature can also be attributed to the possibility that the consumer simply hasn’t had a situation to experience the feature first-hand, even if their vehicle is equipped with it. Some ADAS features, like Automatic High-Beam Headlights and Adaptive Cruise Control with Active Lane Centering engage often throughout the course of a consumer’s drive, resulting in 62% and 57%, respectively, of respondents who have heard of the features saying they’ve also experienced them. Conversely, ADAS features that typically only intervene in the event of a required emergency maneuver, like Cyclist and Pedestrian Detection or Safe Vehicle Exit Assist have a much lower percentage of use, 23% and 11%, respectively. As such, in many cases demand for the feature correlates closely with awareness.

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A rather unique exception is Night Vision, a feature with moderate awareness (44%) and very low real-world usage (11%), yet strong interest amongst consumers with almost 60% of consumers wanting it on their next new vehicle. A helpful feature that’s been around for decades since pioneered by GM in the 1990s, today’s Night Vision systems are more accurate and advanced than ever before, some being able to recognize and alert a driver of possible objects, animals, or pedestrians in darkened conditions. These systems are scarce, however, and are just starting to trickle down to mainstream brands and vehicles, but that hasn’t slowed consumer interest based on the perceived benefit of improved visibility. Credit clever advertising both on social media or television and word of mouth, as we believe many consumers know about these safeguarding features, even if they have yet to use the feature in the event of emergency. Some of them are true lifesavers, and once one of these ADAS features activates, that’s bound to boost trust in the technology itself and quickly turn into a “must-have” for the driver.

Younger Consumers Have Highest Awareness of ADAS Features but Not Necessarily the Highest Interest

Overall, consumers have the highest awareness of ADAS features that vehicles have been equipped with for many years, like Blind Spot Cameras (73%) and Rear Cross-Traffic Alert With Automatic Emergency Braking (63%). Awareness drops sharply for newer, more advanced ADAS features, like Unresponsive Driver Stop Assist (25%) or Emergency Evasive Steering Assist (34%), that have only recently started to trickle into today’s vehicles. Younger consumers under the age of 40, however, have higher awareness of all features surveyed, including the newest, and least-known features, compared to those 40 and older. Furthermore, the gap in awareness grows with age for several of these newer, more advanced ADAS features. For example, 89% of respondents between the ages of 18-39 say they’ve heard of Automatic Lane Change Assist compared to just 47% of those age 60 and older.

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Yet while younger consumers are more familiar with all surveyed ADAS features, that doesn’t translate into higher demand across the board for them when compared to older consumers. Historically, when looking at AutoPacific’s FADS data, demand for features that enhance visibility has been higher from older consumers than younger consumers. We see the same holds true here where demand is higher from respondents ages 40 and older for Night Vision, Blind Spot Cameras, and Rearward Automatic Emergency Braking – all features that assist the driver with their ability to easily see around them.

Additionally, when looking at feature reception by age group, whether it be younger generations or those north of the age of 60 years old, there’s positive sentiment for several popular ADAS features. For example, 74% of those under the age of 40 and 78% of those over the age of 60 stated they liked using Adaptive Cruise Control with Active Lane Centering AND Stop and Go. Interestingly, compared to those under the age of 40, those consumers over the age of 60 were more likely to report that many of the ADAS features they used made them feel much safer behind the wheel.

Constant Nagging, Lack of Adjustment Ability Can Lead to Lower Satisfaction

Just because a consumer has heard of and/or actually used a particular ADAS feature before doesn’t necessarily guarantee retention and desirability for it down the road. This proved to be especially true with common ADAS features that closely track a driver’s behavior like Speed Limit Warning and Distracted or Drowsy Driver Monitoring. Both ranked relatively high in awareness (7th and 5th, respectively), as well as real-world usage; however, demand is consequently low (16th and 11th respectively). These two features also have the highest percent of dissatisfaction from users with 18% of those who have experienced Distracted or Drowsy Driver Monitoring and 17% of those who have experienced Speed Limit Warning saying they didn’t like the feature.

It's important to note that for the two aforementioned ADAS features, as well several ADAS features that ranked much higher in terms of demand, consumers have to be able to adjust or change the sensitivity of the feature and have the option to turn it on or off. 44% of those who have used Speed Limit Warning felt neutral about it and 17% didn’t like it, mostly due to annoying nagging reminders and beeping alerts. In addition to complaints about it not working properly, nearly half of those who didn’t like Distracted or Drowsy Driver Monitoring complain of not being able to adjust or change the sensitivity. Alternatively, when asked about feedback on Rearward Automatic Emergency Braking, one of the top wanted ADAS features, some of those who have used it voiced concerns about the braking action being too abrupt or harsh, and the sensing too sensitive.

As more and more automakers fortify their lineups with expansive suites of standard ADAS features, it’s going to be of paramount importance that consumers have the flexibility to make adjustments that suit their preferences and comfort level.

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