Subscription services are creeping into today’s vehicles. AutoPacific investigates consumer demand for these features and the most ideal segment placement.
by Ed Kim, President and Chief Analyst
AutoPacific recently released its forecast of U.S. light vehicle sales, predicting 2023 will reach a year-end total of 14.8 million units sold. Up from a disappointing 13.8 million units sold in 2022, the 1-million-unit increase can be attributed to a few factors, including continued supply chain recovery, and electric vehicle (EV) growth. Supply chain issues are continuing, but at the same time they are easing as well, presenting the main driver for increased sales in 2023. We predict a 5-year peak growth is reached in 2026 as sales level out as pent-up demand, originating from both pandemic-induced supply issues and the looming recession, is fulfilled.
AutoPacific's annual forecast of U.S. light vehicle sales predicts 14.8 million units sold in 2023, increasing to 16.7 million units in 2026.
Introduction of New, Inexpensive Mainstream EV Models Fuels Growth
EVs accounted for 5.6% of total U.S. light vehicle sales in 2022, up from 3.3% in 2021. Of those 2022 sales, 20% came from luxury brand EVs, a new high since EV sales began over a decade ago. Starting in 2023, AutoPacific predicts an increase in mainstream EV market share with the introduction and sales growth of new, inexpensive mainstream models like the Chevrolet Equinox EV and Tesla’s promised sub-$30,000 entry EV.
These new, inexpensive mainstream models will help grow EV sales beyond the affluent early adopters of today to the mainstream consumers that will ultimately be critical for widespread adoption of EVs.
While vehicle sales growth is expected in 2023 and a few years beyond, all indications are that the United States continues to face the threat of a recession. AutoPacific expects this potential recession to be relatively mild; however, the severity and its impact on this year’s auto sales remain a wild card.
by Ed Kim, President and Chief Analyst
Since 2005, AutoPacific has conducted a bi-monthly online survey designed to measure the impact of fuel prices on consumers’ vehicle purchase decisions and driving behavior. Our Fuel Price Impact Study (FPIS) puts years of trend data to work to understand how consumers react to fluctuating fuel prices and how the impact has changed over time.
Historically, AutoPacific’s data have shown vehicle owners to be very tied to their current vehicle type. Whether a luxury brand owner or a mainstream brand owner, next vehicle intentions often mirror the current vehicle, or at least remain in the same macro category (car, truck, SUV, minivan). Lifestyle and family dynamics dictate vehicle segment, and for many, that means they’re locked into a specific vehicle type for 5-10 years.
Independent of fuel prices, AutoPacific’s Future Attribute Demand Study (FADS) asks respondents what type of vehicle they intend to purchase next. While current luxury brand car owners are slightly more committed to their current segment, more than 70% of all current owners intend to stay within the same macro segment, with the exception of Mainstream Large SUV/XSUV 2-row owners, who may be more likely than other SUV/XSUV owners to migrate to a car or truck next time.
Whether a luxury brand owner or a mainstream brand owner, next vehicle intentions often mirror the current vehicle, or at least remain in the same macro category.
What happens when fuel price is added to the mix?
When asked about the impact of fuel prices on their next vehicle type and powertrain intentions in AutoPacific’s bi-monthly FPIS, only 24% of current luxury brand owners and 21% of current mainstream brand owners say higher fuel prices would change their next vehicle type. The catch? Fuel prices must increase by approximately $1.25/gallon from where they are now for that to happen. Respondents are more likely to change powertrain type, but at a higher fuel price than for vehicle type.
Current luxury brand owners say it would take a fuel price of $5.96 per gallon (median) for them to change powertrain type – a $1.86/gallon increase over the price they’re currently paying. Numbers are similar for current mainstream brand owners, who would change powertrains at a price $2.05/gallon higher than what they’re currently paying.
Right now, a relative lack of alternative powertrain choices within vehicle segments means that it’s often easier for a consumer concerned with fuel economy to stick with a gasoline engine and migrate to a more efficient vehicle type. The ease of transition and comfort level with a different powertrain technology remains a challenge for the auto industry that only time can rectify.
Respondents are more likely to change powertrain type, but at a higher fuel price than for vehicle type.
Data from AutoPacific’s 2022 Future Attribute Demand Study reveals a link between demand for features and time spent in their parked vehicles. Respondents who use their mobile device for parked vehicle activities other than phone calls have higher demand for connectivity features like USB-C outlets, in-vehicle internet connections and video streaming, as well as seating features like heated and ventilated front seats, memory driver’s seat position and massaging seats. Additionally, respondents who currently own an EV are more likely to be active on their mobile devices, compared to owners of all other engine types, making EVs a prime host for connectivity and seating features.
by Robby DeGraff, Manager of Product and Consumer Insights
While motivation accelerates for an all-electric future from both inside and outside the automotive industry, new vehicle shoppers are more likely to purchase a traditional hybrid than a full battery-electric vehicle within the next three years, according to our 2022 Future Attribute Demand Study (FADS), which gauges consumer interest in more than 120 vehicle features and powertrain types. Automakers are quickly adding a flurry of EVs to their lineups to meet sweeping mandates and zero-emission goals, as well as growing demand, but range anxiety, lack of at-home or public charging infrastructure, and purchase cost remain a concern for many consumers.
Expectedly, demand for gasoline engines is the strongest at 52% of all new vehicle intenders in this year’s study, which also means that nearly half of all intenders plan to acquire something other than a gasoline powertrain. For electrified powertrains, demand is the strongest for traditional hybrid powertrains at 18%, while plug-in hybrid and EV powertrains each earn 11% intention among of all new vehicle intenders. Demand for diesel is scant at 5% while hydrogen fuel cell powertrains register just 3% demand.
Nearly 1/2 of new vehicle intenders plan to purchase a powertrain other than gasoline, with 18% intending a hybrid and 11% intending an EV or PHEV.
AutoPacific’s analysis suggests that the ease of purchasing and owning a traditional hybrid vehicle versus a more advanced EV is likely the primary reason behind their higher demand. Traditional hybrids eliminate many of the perceived “headaches” of owning an EV. There’s no added need for a consumer to invest in an at-home charging station, plan their driving route based on available public charging stations, or fear range anxiety. Furthermore, many of today’s hybrids promise combined average fuel economy approaching 60 mpg, while many hybrid mid-size SUVs can approach 40 mpg.
Not everyone may be set up to own an EV yet and for many new shoppers, traditional hybrids are still the most accessible and affordable way to go green. Hybrids have impressively evolved over the decades. They’re now found powering a much more diverse mix of popular bodystyles including pickup trucks, SUVs, and crossovers.
Price Plays a Large Role in Hybrid vs EV Demand
Sticker shock is another roadblock for EV intenders, but not for affluent consumers who may be better prepped to pivot away from ICE ownership. Data from this year’s FADS study reveal that among intenders of EVs, 48% plan to spend at least $50k on a new vehicle, compared to just 22% of traditional hybrid intenders. The truth is, there are actually quite a few great lower-priced EVs below $50,000 on sale right now, and on the way soon from multiple automakers, But many consumers may not be aware of them just yet.
Shoppers not wishing to open their wallets wide in order to lower their carbon footprint can find reprieve via efficient traditional hybrids that are readily available at more approachable price points. As such, there’s more desirability for them and less financial burden. Data show that among intenders of traditional hybrids, 78% plan to spend below $50k on a new vehicle, compared to just 52% of EV intenders.
AutoPacific data reveal that 48% of EV intenders plan to spend at least $50k on a new vehicle, compared to just 22% of traditional hybrid intenders. Conversely, 78% of hybrid intenders plan to spend below $50k on a new vehicle, compared to just 52% of EV intenders.
While demand for EVs is on the rise and more affordably priced models are entering the scene, there are many longstanding issues that need to be addressed over time in order for demand to outpace that of ICE and traditional hybrids. Until then, hybrid vehicles will continue to serve as the key pathway for consumers to collectively move towards a zero-emissions future.
by Ed Kim, President and Chief Analyst
What features do new vehicle intenders want to have in their next vehicle? We recently completed fielding the 2022 edition of our signature Future Attribute Demand Study (FADS), designed to help automakers and suppliers better understand consumer demand for more than 120 features and technologies. With insights from over 11,000 respondents who intend to purchase a new vehicle within the next three years, AutoPacific’s FADS not only identifies what features are wanted overall, but also identifies features desired at a segment, powertrain and demographic level, while also collecting psychographic and in-vehicle activity insights from all respondents.
The 2022 FADS reveals a strong top ten mix of features from every category, with wireless charging pad for front passengers landing at number one, followed by sunroof/moonroof, all-wheel drive/4x4, dash camera and front and rear parking sensors. Having such a variety of features land in the top ten highlights the need for automakers to look at the big picture and understand that it’s not all about safety, or comfort, or infotainment, but providing a combination of features that meet the many needs of consumers.
Top 10 Features Desired by New Vehicle Intenders
Are Alternative Powertrain Vehicles the Path to Autonomous and Other Advanced Vehicle Technology Implementation?
Sales of alternative powertrain vehicles, such as hybrids, plug-in hybrids and full-electric vehicles, are forecast to increase, in some cases exponentially, over the next five years, according to our 5-year sales forecast, providing automakers with many opportunities to implement the latest iterations of autonomous and advanced driver-assistance technologies. Alternative powertrain intenders have historically been on the cutting edge of technology and are typically more open to, and demanding of, advanced technologies. FADS data confirms this hypothesis and really reveals how electrified vehicles can truly reshape the vehicle and driving experience of the future.
Features with the highest percentage point different in demand between gasoline and EV intenders
Among the features with the highest percent difference in demand when comparing gasoline intenders to EV intenders, are four autonomous driving features and three advanced driver-assistance features. In most cases, feature demand incrementally increases from gasoline to hybrid, PHEV, and then to EV intenders. Additionally, demand is greater from EV intenders for all but two surveyed features: heated front seats and sunroof/moonroof, which both fall about even with gasoline intender demand. With so much opportunity for feature implementation, it’s an exciting time to be a manufacturer of EVs.
by Ed Kim, President and Chief Analyst
SUVs, large or small, are here to stay, despite rising fuel prices. AutoPacific recently asked over 300 current SUV owners how high fuel prices would affect their next vehicle purchase decision. The survey, issued bi-monthly to AutoPacific’s proprietary panel of respondents, is designed to gauge consumer reactions to fuel prices over time. Findings reveal that current high, or higher, fuel prices would cause the majority of current SUV owners (45%) to consider a hybrid or plug-in hybrid (PHEV) SUV or Crossover, while 27% would consider an EV SUV or Crossover, and 29% would be unaffected. Most new traditional gasoline SUVs get much better fuel economy now than they did when fuel prices spiked in 2008 and caused a shift in the market. Couple that with an influx of hybrid, PHEV and EV SUV offerings and consumers have so many choices that they don’t have to downsize or change vehicle types.
Current SUV owners would prefer to consider an alternative powertrain SUV or crossover than downsize or change vehicle types.
Alternative Powertrain SUV Market Share Growing at a Higher Rate than Overall SUV Market Share
According to AutoPacific’s annual forecast of U.S. light vehicle sales, SUVs will continue to dominate the market, reaching over 60% market share in 2027. Additionally, AutoPacific’s most recently issued forecast shows SUVs will make up over half of alternative powertrain market share in 2023 and beyond, and alternative powertrain SUVs will account for over a quarter of the total market by the end of 2027. While SUVs continue to take over the new vehicle marketplace, alternative powertrain SUVs will continue to make up more of those SUV sales. In 2021, alternative powertrain SUVs made up 16.4% of total SUVs sold in the U.S. By 2027, AutoPacific expects they will make up 42.6% of all SUVs sold, giving SUV shoppers many options from which to choose.
Alternative powertrain SUV share of the overall market is growing at a faster rate than overall SUV market share.
Latest AutoPacific Forecast Shows a Gloomy 2022, But Share of Higher Priced Segments Grows
Due to continuing supply chain issues that remain a major impediment to industry sales recovery, AutoPacific is expecting an underwhelming 2022 with total U.S. light vehicle volumes at about 15.5 million units. Consumers can expect continued low inventories at dealerships and dealer markups resulting in higher transaction prices, and rising interest rates will have further negative impact on their purchasing power. As transaction prices rise, people who are acquiring new vehicles during this time are likely to be more affluent, so market share of higher-priced segments, such as Luxury SUVs and Pickups, is forecast to grow this year even as supply remains constrained.
by Ed Kim, President and Chief Analyst
AutoPacific recently investigated the road trip plans of drivers in the U.S., finding that nearly half of respondents (49%) plan to take a road trip/driving vacation within the next six months and another 16% are considering taking one.
Collected from 644 respondents in May of 2022, the findings are a part of our bi-monthly Fuel Price Impact Survey, designed to gauge consumer reactions to fuel prices over time. People are traveling again,” says AutoPacific president and chief analyst. As COVID restrictions continue to wind down throughout the U.S., consumers are ready to get out into the world again and road trips are a great way to ease back into it.
At the time that the latest survey was in the field, the national average price at the pump for regular grade gas was $4.60 per gallon according to AAA (https://gasprices.aaa.com), and AutoPacific’s survey respondents reported paying a similar price of $4.58 per gallon. Of those who said they plan to take a road trip, when asked if recent fuel price increases changed their travel plans, only 2% of respondents said they will cancel their plans due to recent fuel price increases and 8% said they will delay their plans until prices decrease. Additionally, 9% said they will drive a shorter distance than originally planned and 7% said they will consider flying instead of driving.
Only 2% of survey respondents say they will cancel their road trip vacation plans due to recent fuel price increases.
What about an increase of $1.50 per gallon?
Despite their intention to travel, consumers are not only faced with current high fuel prices, but also the expectation that prices will continue to rise. Due to a variety of factors, fuel prices are expected to continue rising over the summer, which is terrifying for many drivers who are looking forward to getting out and seeing the world again. Still, when asked how a fuel price increase of $1.50 or more per gallon than now would affect their willingness to take road trips/driving vacations, only 16% of respondents said they would not be willing to take road trips. Consumers have a threshold, and many are already stretched to the limit with current gas prices, but the desire to travel outweighs the financial concerns for many.
16% of respondents say they would not be willing to take a road trip if fuel prices increase by $1.50 per gallon or more.
by Ed Kim, President and Chief Analyst
AutoPacific’s latest round of Fuel Price Impact Survey (FPIS) data comes amid alarmingly high fuel prices and continued conflict in Ukraine. The survey, issued bi-monthly to AutoPacific’s proprietary panel of respondents, received responses from over 650 vehicle owners in the United States.
The data reveal that over half of consumers (52%) remain unwilling to change the type of vehicle they drive even with higher fuel prices. The 25% who say higher fuel prices would cause them to change the type of vehicle they drive say the price of fuel must be about $1.00 per gallon more than what they’re paying now, or a median price of $5.32 per gallon compared to the current median of $4.23 per gallon. Historically, and during the long stretch of fairly consistent fuel prices, respondents have said it would take approximately $1.50 more per gallon to cause them to change their vehicle type. Despite substantially higher fuel prices recently, the data tell us that consumers are generally unwilling to change the type and size of vehicle they drive.
Over half of consumers (52%) remain unwilling to change the type of vehicle they drive even with higher fuel prices.
SUV Owners Would Choose Alternative Powertrains Over Downsizing
For those who currently own an SUV or crossover, nearly half (47%) say they would consider a hybrid or plug-in hybrid SUV while 30% would consider an all-electric SUV if fuel prices are as high or higher than now when they’re shopping for their next vehicle. Under those circumstances, only 18% of SUV or crossover owners would consider downsizing to a smaller SUV or crossover, while a scant 7% would consider getting out of their SUV or crossover and into a sedan or other type of passenger car. Consumers are turning to technology rather than downsizing to solve the problem of rising fuel prices. Even as fuel prices are the highest seen in over a decade, SUV purchase intention continues to rise, with over half of respondents saying they would choose an SUV for their next vehicle and another 13% intending to choose a pickup.
Only 18% of current SUV or crossover owners would consider downsizing to a smaller SUV or crossover, while a scant 7% would consider getting out of their SUV or crossover and into a sedan or other type of passenger car.
The Conflict in Ukraine Plays a Role in Alternative Powertrain Interest
59% of respondents expect fuel prices to increase in the future, representing the majority of respondents. Of those who expect fuel prices to continue rising, 81% expect that to happen as a direct result of the conflict in Ukraine. Consumers have far more options now than during previous fuel price spikes with the influx of hybrid, PHEV, and electric vehicles now available for sale and coming in the near future, and it seems that fuel price increases and cries for energy independence have given electrified powertrains a boost in consumer demand.
25% of survey respondents say factors directly related to the conflict in Ukraine make them more likely to consider an EV for their next vehicle. While “charging is cheaper than fueling” remains the top reason why EV intenders would choose an EV (85%), 63% of EV intenders would choose an EV because EVs contribute to energy independence for the U.S. and 52% of EV intenders say the conflicts around the world make them want to reduce their consumption of oil.
Consumers have more options now than during previous fuel price spikes with the influx of hybrid, PHEV, and electric vehicles. Fuel price increases and cries for energy independence have given electrified powertrains a boost in consumer demand
by Deborah Grieb, Director of Marketing and Consumer Insights
With the advent of fully-autonomous vehicles on the way, who will win the race first to develop the most trusted system? As part of AutoPacific’s recent study gauging consumer perception on fully-autonomous vehicle technology, we asked respondents about their trust in 56 brands, both automakers and popular technology companies alike. From Apple to Volvo, consumers across all age brackets picked who they would trust the most, and the least, when it comes to developing safe and reliable fully-autonomous vehicles.
Before diving into the top 10 most-trusted brands, let’s take a look at just how ready consumers are to embrace the technology. While automakers, legacy and startups, and even a few technology companies promise appealing, cutting-edge fully-autonomous vehicles… if the consumer isn’t entirely on board then the pace of adoption may stall the arrival of this technology.
Younger Generations Are More Welcoming to AVs
What age group is the most eager to embrace fully-autonomous vehicle technology? Expectedly, 22% of younger shoppers ages 30 to 39 want AVs as soon as possible followed by 14% of shoppers ages 18 to 29. The eagerness begins to drop as the age brackets climb, with just 3% of polled consumers ages 60 and up wanting it ASAP. However, the common theme displayed across all polled age brackets is that the majority of consumers would prefer to wait until there is a proven track record of safe and/or reliable fully-autonomous vehicle technology. The most reluctant to ever have a taste for fully-autonomous vehicle technology? Drivers aged 60 and up.
While it appears most consumers, regardless of age bracket, are more comfortable waiting a bit longer for fully-autonomous vehicles, that doesn’t mean that automakers and technology companies should delay getting the ball rolling.
At this time, there are no fully-autonomous or “self-driving” vehicles on sale today. However, some automakers including GM, Ford, Tesla, and Toyota do currently offer more comprehensive ADAS suites that do legally allow for Level 2 semi-autonomous hands-free driving on marked highways in ideal, safe conditions (as required by the National Highway Transportation Safety Administration or NHTSA, a driver’s eyes and attention must be kept on the road when these hands-free systems are activated and in use).
Consumers trust the following brands the most to develop safe, reliable fully-autonomous vehicles: Tesla, Toyota, BMW, Chevrolet, Ford, Apple, Honda, Audi, Subaru, and Cadillac.
Consumer Trust Sits Highest With Tesla, Toyota, and BMW
With 32% of consumers, Tesla claims the crown for being the most trusted brand for developing safe and reliable fully-autonomous vehicles. This likely can be credited to much more “buzz” surrounding the automaker’s pricey and controversial Full-Self Driving driver assistance tech in which current Tesla owners are able to sign up as volunteers and help demo the Level 2 semi-autonomous hands-free capability for Tesla’s own R&D efforts. Second place is Toyota, with 19% of consumers picking the brand as their most trusted; the brand in early March started rolling out its first Level 2 semi-autonomous hands-free driving aid for the hydrogen-powered Mirai’s 2022 model year. Perhaps not surprisingly, the younger the consumer, the more who trust Tesla while the older the consumer, the higher the trust swings for Toyota.
18% of consumers picked BMW, 16% Chevrolet, and 14% picked Ford - with the latter two automakers currently offering Level 2 semi-autonomous hands-free highway assists on various models in their respective lineups. However, in a similar case with Tesla, younger consumers are substantially more likely to trust BMW (42% of consumers ages 18 to 39) compared to those who trust in Chevrolet and Ford (just 25% and 16%) respectively.
Interestingly, despite not having a vehicle of its own on sale (yet), 13% of consumers trust Apple to develop safe and reliable fully-autonomous vehicles. While it didn’t earn a spot in the top ten list above, 5% of consumers did pick Sony as a most-trusted brand.
Honda, Audi, Subaru, and Cadillac make up the remaining four of the top ten most trusted automakers to develop safe and reliable fully-autonomous vehicles. Cadillac is the only automaker in this group four to currently offer a Level 2 semi-autonomous hands-free highway driving aid, Super Cruise, which is available on select CT6, CT4, CT5, Escalade, and XT6 models, as well as soon the all-electric LYRIQ crossover due for our 2023 model year.