Will Gen Z go EV? Understanding modern vehicle preferences

Gen Z, born between the mid-1990s and early 2010s, has distinct mobility and purchasing preferences. A study from McKinsey highlights Gen Z’s mobility preferences, and how attitudes towards vehicle ownership have changed. 

Shared and public mobility

Gen Z embraces shared and sustainable mobility alongside private cars. 

Public transit and micromobility options like bike or escooter rentals have gained massive popularity amongst younger people since their widespread introduction in city centres. Almost 55% of Gen Z consumers are open to sharing their private vehicles, showing an interest in collaborative mobility solutions. 

According to the study, 50% of Gen Z would like their next vehicle to be an EV. However, Gen Z is flexible in how they use transportation and frequently choose shared and sustainable options. 

The study shows they plan to rely less on private cars and incorporate more shared mobility options. This shift can be attributed to the high purchase cost of new vehicles. This makes private ownership, particularly of an EV, unattainable for most of Gen Z.

Gen Z’s buying habits

Leasing remains unfamiliar to many members of Gen Z, as twice as many respondents in this group have never heard of it compared to other age groups. The main reasons behind their reluctance to choose leasing are the fear of hidden costs and the insecurity stemming from a lack of knowledge about this option.

- Advertisement -

Half of Gen Z buyers emphasised purchase price as a major barrier in their vehicle selection. Realistically, leasing is also simply too far out of budget for the vast majority of Gen Z.

An online-first mindset is prevalent among Gen Z buyers, with over 55% of them planning to order their next car online. In contrast, only 17% of Gen Z buyers rely on traditional car dealerships, which is significantly lower than the percentage among older generations. 

Furthermore, more than two-thirds of Gen Z consumers are likely to opt for online vehicle financing after configuring their dream vehicle, surpassing the rates seen among older age groups.

Who does Gen Z trust with their money?

Gen Z buyers exhibit distinct channel preferences compared to older shoppers when it comes to leasing. Interestingly, the number of respondents open to leasing from an independent bank or leasing player is twice as large as in older age groups. 

The study found that captive players and online leasing companies should focus on persuading the younger generation to view them as a viable purchasing channel. On the other hand, independent banks and leasing providers should strategise on maximizing sales conversions to tap into this potential market.

Gen Z’s inclination towards multimodal mobility highlights the importance of integrated offers across channels. Their preferences for electric and smaller vehicles and the popularity of leasing call for adaptable ownership models. EV ownership needs to become an affordable notion for all age groups, and that means massively increasing the flexibility of leasing offers.

Automotive financing players must meet Gen Z on their terms, leveraging digital platforms, educating about leasing, and providing realistic pricing and affordable financing options. By doing so, they can cater to Gen Z’s unique mobility and purchase preferences, securing growth and the popularity of emobility for years to come.

Related Articles