The auto affordability dilemma isn’t a U.S. one; it’s a global one. Across markets, nearly a third of mobility users plan to postpone their next new-vehicle purchase due to financial constraints, and 45% are considering downsizing the vehicle to stay within budget.
Yet technology is becoming a key differentiator, and that’s putting a lot of pressure on legacy brands — especially premium ones. Traditional differentiators including brand image, design and comfort are taking the back seat to tech, and that distinction is especially stark in looking at priorities among those under 45 years old.
The top-level takeaways come from the McKinsey Mobility Consumer Pulse 2026 Survey, which included responses from “more than 20,000 mobility users” from China, Germany, Japan, the U.K. and the U.S. Conducted in February, it included about 3,000 car owners per market, of which 1,000 are EV owners, then weighted the results for each market to represent the fleet makeup in that market.
According to McKinsey, 34% of those who drive a premium-brand vehicle are especially open to switching brands at the next vehicle purchase, as opposed to 25% of those with a mass-market vehicle. And across global markets, roughly 25% of respondents said they would be “very likely” to switch brands for better self-driving functionality.
“OEMs need to find ways to invest in these features, despite still slow early-stage adoption curves of these sophisticated ADAS capabilities,” said the firm in a study summary, noting that purchase intent for such features is higher in 2026 than last year.
A generational, less brand-loyal tech divide
At the same time, the value of autonomous driving technology has started to take off, with Chinese automakers, in addition to Tesla and others, leading a wave of global interest in the tech.
ADAS tech has up to double the purchase influence in China than it does in Western auto markets, according to McKinsey. Half of vehicle shoppers in China say that they’re very likely to switch brands for better ADAS. At present that stands at just under a quarter of shoppers in the U.S.
Younger shoppers are far more likely to switch brands for particular technology. McKinsey found a generational divide at about 45 years old; those younger than that agreed they’d be very likely to switch brands for better ADAS, but among those 45 and older just 11% were so committed to the tech.
McKinsey notes that, around EV technology as well as ADAS, the customer perception of Chinese brands has been evolving very quickly in Europe. There, 54% see Chinese OEMs as leading in EVs in Europe in 2026, versus 44% in 2025.
Affordability pinch plus new priorities
As they up this investment and rise to that tech challenge, affordability is also becoming more important to premium-brand customers, according to McKinsey, while driver-assistance systems, digital solutions and EV technology are all important alongside price.
A “non-negligible share” of U.S. car buyers, as the firm puts it, is delaying their vehicle purchase or trading down to a cheaper vehicle given financial constraints. That amounts to about 35% of U.S. respondents planning to downsize and 43% of U.S. respondents planning to delay their next vehicle purchase. Even 31% of premium-segment respondents said they were delaying their next purchase.
About half of all U.S. car demand, as the firm figures it, is limited to a budget of under $45,000, and 42% of U.S. pickup shoppers see their next new-vehicle budget at $40,000 or less.
Premium brands need to change, but there is no universal roadmap for how, McKinsey analysts underscored in a Q&A session with the media related to the release of the study.
Broadly, premium brand OEMs need to invest more in “loyalization,” as McKinsey puts it — by pulling them back with comfort, design, handling, performance and more. For instance, some of the key to premium brands’ success in coming years could rest in how automakers reconceive the interior to go along with autonomous tech, said Philipp Kampshoff, senior partner and global co-leader of McKinsey’s Automotive & Assembly Practice.
“You almost have to double-click in the different areas of technology; that’s kind of how I would see it,” said Kampshoff, who sees powertrain, ADAS tech and infotainment as among the different buckets that automakers need to get right based on rapidly changing expectations.
The observations about premium brands and their pressure to reformulate, if not reinvent, were echoed in JD Power’s 2026 U.S. Automotive Performance, Execution and Layout Study released last week, the gap between premium brands and mass-market brands is narrowing. JD Power noted in its release on the annual study that the “emotional satisfaction gap” between premium and mass-market brands has shrunk as mass-market models close the feature gap.
“Premium vehicles no longer hold outsized advantages in areas such as infotainment, exterior, driver-assistance systems, headlight performance and door-closing sound, suggesting owners increasingly define a premium ownership experience by overall execution rather than brand alone,” added Power.
EVs remain a big opportunity for brands
Premium brands have already lost a wave of technology buyers to Tesla and other brands that embraced EVs. As McKinsey results suggest, those owners aren’t going back to gasoline vehicles, but they are willing to embrace their technology of choice with another brand.
According to McKinsey’s survey, 89% of U.S. respondents with an EV plan to replace it with another vehicle that plugs in. Just 8% or less of EV owners switch back all the way to a non-electrified internal combustion model.
To break it out, 70% of EV drivers signaled the intent to get another EV, the study found, while 19% of those EV drivers aim to go with a plug-in hybrid next time. And among plug-in hybrid households, 45% plan to replace their PHEV with another one, while 43% plan to replace it with a fully electric vehicle.
U.S. shoppers are also more open to switching brands when transitioning into EVs, especially when they’re coming from premium brands. But 52% of those with EVs said they’re likely to switch brands.
All that considered, consumers’ change of vehicle type to an EV represents a "specific brand evaluation point for customers,” according to McKinsey.
Embracing the “bridge” may be key
The list of reasons why consumers are resisting EVs has changed significantly in recent years, according to McKinsey. Consumers are far less concerned about range anxiety and driving range, which both used to be near the top of the list but have been replaced by concerns over home charging, battery longevity and cost.
Whether relating to automated driving or electrified powertrains, McKinsey’s Kampshoff pointed to the importance of legacy brands investing in “bridge technologies” without losing sight of the longer-term technology roadmap.
“If you go back two or three years, that bridge was too short,” said Kampshoff. “Now with all the changes that we see in regulation and in subsidies for battery electric vehicles and on-off tariffs and so forth, we are seeing that maybe customers don’t jump directly to battery electric.”
In the eyes of the OEM, that bridge now got longer where there’s real viability of a plug-in hybrid or a range-extended vehicle over a longer duration — that bridge is now seven or eight years,” he said.
It gives legacy automakers more of a chance to take market share from incumbent EV makers, Kampshoff underscored, while it’s more daunting for those who have led in EVs, charging and technology, he said — without mentioning Tesla by name.
“We’ve seen the biggest likelihood of folks to change brands if you’re young, if you’re an EV buyer, and if you’re premium,” he reiterated. “So again, this can be something good or bad, depending on how you look at this.”
