The road ahead: How legacy auto brands will level the EV playing field in 2022
Now that the CES show is over, carmakers will focus on making their products more affordable, increasing the driving range.
The road ahead: How legacy auto brands will level the EV playing field in 2022
Now that the CES show is over, carmakers will focus on making their products more affordable, increasing the driving range, and emphasizing their brand heritage to catch up to companies like Tesla.
This year's Consumer Electronics Show (CES) is overshadowed by the omicron variant. However, one area is still generating a lot of excitement: electric vehicles (EVs). A lot of companies are showcasing their new products at CES, including General Motors, BMW, Hyundai, Stellantis and Daimler. Even though some companies are exhibiting virtually because of the COVID-19 pandemic, the announcements are still significant. Yesterday, Mercedes Benz showcased a sporty Vision EQXX concept car that is focused on long-distance travel. General Motors plans to show an electric version of its Silverado pickup truck on Wednesday.
Many companies are now working on electric cars. This is because Tesla has a head start in this area and has set new expectations for what people want in a sustainable car. Even though traditional marketing has not been very successful for Tesla, people are now interested in electric cars. This is good news for the companies who have been playing catch-up, because they can now be on the leading edge of this industry. In order to take advantage of the quickly evolving electric vehicle market, you may need to try some unusual marketing techniques. This could include taking risks in virtual reality.
Brian Irwin, the managing director of automotive and mobility leader for North America for Accenture, said "Nobody wants to match what's in the market" when asked about how car companies feel about electric cars. "They're being much more aggressive in EVs and they have expectations of market leadership in and of themselves."
Irwin said the space is becoming more complex.
There is expected to be more aggressive marketing for electric vehicles in 2022. This is following a lot of new announcements and brand refreshes last year. The electric vehicle segment is getting more popular, with more types of cars like pickups becoming available. As the electric vehicle market becomes more diverse, the old guard in the auto industry has a chance to talk about qualities that the new companies don't have as much of a stake in, like value and rich brand heritage.
Mat Zucker, a senior partner at brand transformation consultancy Prophet, believes that we are currently in an era of foundational communications. This means that the conversation around brands and their performance is going to change. He believes that performance will be redefined and broadened in the near future.
Rounding a corner
False starts have caused people to be less interested in electric vehicles. The standards for fuel-economy for cars with gasoline engines keeps getting better, so people don't think they need electric vehicles as much. They also cost more money than regular cars.
There has been a change in the political guard and people are more interested in electric vehicles because of it. Ipsos data shows that the number of people who are interested in electric vehicles has tripled since 2018. This is likely because there are more choices for consumers now and they are becoming more familiar with them.
According to a study released in September, Accenture found that nearly two-thirds of consumers now describe themselves as "sustainability-minded drivers," making environmental considerations a primary concern. The research surveyed 8,500 respondents in the U.S., China and eight countries in Europe.
In 2021, we saw a big change in how people felt about the environment. The new administration was much more focused on taking care of the environment, and this caused people to start caring more about environmental issues.
Many people who care about the environment are willing to pay more for a more sustainable car. 30% of the people Accenture studied were willing to pay between 1%-5% more, and more than 60% were willing to pay at least 6% more. This shows that there is a growing demand for environmentally friendly cars.
"When you first started marketing your product, you focused on people who cared about the environment and were technologically savvy," said Lindsay Murtagh, chief client officer at PHD. "But as your market has changed, you've had to change your marketing strategy to target different groups of people."
Thinking beyond green
If the argument for automakers hitting the gas on EVs in 2022 is partially motivated by existential climate questions, consumers shouldn’t expect to see that mandate reflected in marketing. Tackling touchy social topics has become common for brands in recent years, but presents a risk for car companies that are feeling greater pressure to spur adoption of EVs than get recognition from social media.
David Yang, director of innovation consulting at R/GA, said that electric vehicles from various brands are not marketed as sustainable products.
The Ford F-150 Lighting should be used as a case study. Pickups tend to focus on what they can do for the customer, and this is clear from the product page which goes into detail about features such as the Phone As A Key option and Ford's Intelligent Backup Power. However, Ford had to halt reservations on the model at 200,000 in December due to manufacturing concerns.
Many people are not yet used to how electric cars work, so car companies are emphasizing the functions of their cars, like how far they can drive. This is likely to be a common theme in car marketing for the short term. Car marketing may not change as drastically as it has in other categories that focus on what the product is supposed to do.
Yang said that it is a "smart" idea for brands to be careful about how they appeal to their customers. Brands don't want to turn their customers away by doing anything that would offend them.
There are some electric car brands that care about the environment. Rivian is one of them. Ford is still involved with Rivian, even though their deal to develop electric cars together fell through. Rivian has a website where it talks about preserving the natural world forever. Other companies will probably start talking more about their environmental responsibility to shareholders as sustainability becomes more important to investors.
Even though campaigns highlighting price, performance and availability will be popular among more mass-market brands, campaigns that focus on heritage through electrified versions of well-loved models will also be successful. "A story around value ... that's traditional OEMs bread and butter," Yang said. "There's a lot of strength and equity there that they can tap into."
Obstacles ahead
Price and brand equity will be important factors in the race against Tesla, which has rolled out cheaper options like the Model 3 but largely remains a premium brand.
The company does not do traditional advertising and it also doesn't have a public relations department. Instead, the company's lead comes from word-of-mouth and the online following of its founder and CEO Elon Musk. Older OEMs without a foot in the startup world will find it difficult to replicate these advantages.
Yang said, "It's very hard to talk about EVs without talking about Tesla. They've had a huge impact on the market." He continued, "Even though brands might not be mentioning Tesla directly, they are certainly thinking about them."
Some well-known car brands are being made into electric cars. These include the Ford F-150, Mustang, and Hummer. Even though these cars will now be electric, they still won't have a good environmental footprint.
"If I have a lot of different brands all offering a battery electric vehicle powertrain, then brand becomes important as a defining feature," Irwin said. "If everyone is in the market, and we have eliminated that product offering perspective, then brand and all of the things that brand represents are back on the table."
Another problem for legacy automakers' electric vehicle plans is the supply chain. There are still not enough semiconductors, and if this problem continues, it could dissuade potential buyers who have long seen EVs as falling short of their potential.
Though the number of car lots is decreasing, this does not mean that marketers should stop advertising electric vehicles. In fact, some companies are changing their marketing strategies. Cadillac, for example, stopped using discounts and deals to market their new all-electric SUV and instead focused on building the brand. The SUV sold out within minutes of being offered for preorder.
"Even though we have had to stop a lot of things, we are still investing strategically," said Cadillac CMO Melissa Grady during a talk addressing supply chain challenges at the Advertising Week conference in October.
If other car companies want to be successful, they should consider doing something different. They also need to make sure they have enough cars to sell. If their competitors can't produce enough cars, then the company who can will look better.
"Just because you don't have a specific model of your product in the showroom, doesn't mean that you can't advertise and support your brand," said PHD's Murtagh. "There are always opportunities, so it might not be lower funnel, it's more upper funnel."
New avenues to explore
Another way to experiment with EVs in 2022 is the metaverse. This is a virtual world that people can visit. It can be used to show people how electric cars work. This is because people are afraid of getting sick from COVID-19.
Last year, Hyundai established a virtual venue on the gaming platform Roblox to showcase its mobility and electric vehicle products, including the Ioniq 5 all-electric SUV. Roblox is popular with Gen Z and Gen Alpha consumers, making the theme park-like activation—the first of its kind from a global automaker—a clear bid to foster loyalty with the next generation of drivers.
Some people think that the metaverse won't be a big deal for cars in the near future. But it's possible that by 2022, more people will be interested in it because they are used to things like gaming and they care more about the environment.
Yang said that as more young people are buying cars, EVs will become more popular. It will be important to meet these potential customers where they are and communicate with them through the channels they prefer.
"Since we're not all necessarily involved in the metaverse at this moment, it will be a good way to experiment with some things so that they have the right information to work with when those things actually take off," he added.
