Tesla's 'Cool Factor' Ebbing While These 2 Auto Brands Command More Loyalty Than Elon Musk's EV Giant, Morgan Stanley Survey Finds

The Tesla, Inc. TSLA brand is losing its charm among the younger generation, while there has been a continued preference for all things Apple, Inc. AAPL, Morgan Stanley said in a report released Sunday.

ICEs Over EVs: Morgan Stanley’s survey of 575 summer interns, who will likely grow to be the next-gen business leaders, revealed that they preferred gasoline-powered cars over electric vehicles by nearly a 2:1 ratio.

The ideas of these are bound to challenge the status quo, the firm said.

The preference for EVs fell for a second year, with only 15% favoring these vehicles. This was 22% in 2023 and 30% in 2022. On the other hand, ICEs were favored by 28%, up from 23% in 2022.

The data affirms Morgan Stanley’s view as it took down its 2030 EV penetration forecast from 25% to 20%.

A little more than 50% think owning/leasing a car will still be necessary in 2030, up from 48% of the respondents who thought likewise last year.

The percentage of respondents who said they would not use robotaxis increased from 12% last year to 19% in 2024. “Full autonomy may be farther out than most predict – particularly from a consumer trust standpoint,” Morgan Stanley said.

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Tesla’s “cool factor” is cooling, the firm said, with only 11% of the respondents saying it is the most desirable brand, down from 14% last year and 30% in 2021. Tesla’s loss translated to gains for Mercedes-Benz Group AG’s MBGAF Mercedes brand and Bayerische Motoren Werke AG BMWYY. The former was the most desirable for 19% of the respondents, while the latter for 15%.

Apple Brand Pull Intact: Morgan Stanley said there has been continued preference for “all things Apple”. The survey found that the iPhone was the dominant smartphone brand, with 93% ownership, up two points from 2023. The preference for the iPhone stems from the focus on superior battery life and compatibility with other owned technology devices.

But only 4% mentioned AI-powered features as one of the most important drivers of smartphone purchases, which will be key to iPhone upgrades this next cycle.

A recent BofA report said Apple customers remain loyal to the iPhone — with its unique iOS operating system being the chief selling point among a generation of iPhone users — they may not embrace the Vision Pro just yet.

Beyond the iPhone, respondents’ Apple ecosystem spending remained robust, with 68% of them spending on
Apple Services in the last 6 months, and 93% owning at least one Apple device in addition to an iPhone, with AirPod, Mac and iPad at the top of the list. However, only 1% of the respondents currently owned the Apple Vision Pro AR/VR headset.

Tesla fell 1.13% to $189.59 in premarket trading, according to Benzinga Pro data, while Apple moved down 0.83% to $208.07.

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