A New Paradigm for Selling EVs

So where are the EVs An amazing 44 percent are in China where the government has mandated a switch to electrics And another 31 percent are in Europe thanks to a big push from the European Union The US has just 17 percent of the vehicles on the road and the 231000 EVs sold in 2020 represent just two percent of the overall marketClearly the market needs a push and some bold strategies on the part of automakers Right now EVs are a loss leader and hardly a profit center As Jim Henry writes at Ward39s quotAnalysts and investors worry about what analyst Mark Wakefield of AlixPartners calls a 39profit desert39 the auto industry has to cross the unknown number of years automakers will be pouring billions of dollars into electric vehicles and autonomous driving before there39s enough consumer demand to produce an adequate payoffquotWakefield concludes sensibly that quotall automakers are going to have to cross that 39desert39 and hope consumer demand and sales volume eventually generate enough profitquot Considering that nearly every automaker is switching to EVonly production if they can39t make money from electrics then the whole industry would fail Which isn39t going to happen It39s just that a lean period is aheadHere39s one way of looking at it There are several reasons for the slow US sales with range and high prices being two But another one is a disconnect at the dealer level Automakers are starting to advertise their EVs mainly with fuzzy lifestyle branding but they39re not getting the memo at the showrooms where the EVs are in a corner if they39re there at all One Connecticut customer searched in vain for a Volkswagen ID4 last week and another had an equally exasperating experience buying a Mini ElectricMike Stanton CEO of the National Auto Dealers Association claims that dealers who are fighting a pitched battle against direct sales of independent EVs aren39t against the cars citing Cadillac as an example Cadillac is one of those brands switching to an allelectric lineup along with Volvo Jaguar Bentley and others and required its dealers to invest 200000 in charging infrastructure More than 80 percent did he said proving their buyinBut that39s not the situation on the ground today where one or two electric models have to compete with a full line of gasguzzling SUVs with more obvious incentives for the salespeople Cadillac won39t be allelectric until 2030 and it39s 2023 Lyriq EV pictured at top will still have to compete with the company39s internalcombustion last gaspDealers are actually fighting EV sales by lobbying against states allowing direct sales by startup automakers including Rivian Lucid and Bollinger Motors There are still around 20 states that are direct sales holdouts It39s interesting that Tesla39s strategy of creating a network of studios in upscale markets to educate the public has been widely imitated One such studio for Tesla competitor Lucid opened in New York last week photo above The approach is partly forced by those state laws forbidding actual ownedandoperated showrooms but it seems to be working In 2020 an amazing 79 percent of EV sales was via direct sales Franchised dealers sold only 44902 vehiclesA Sierra Club survey in 2019 found that 74 percent of auto dealerships nationwide aren39t selling electric vehicles at all and at 28 percent quotsalespeople provided no information at all about how to charge an EVquot Another 31 percent had salespeople with no information about state and federal incentives which are substantial as much as 10000 combined in some casesSo what to do Here are some marketing suggestions from the experts including meMcKinsey and Company suggests selling the lifecycle a new concept EVs are much cheaper to operate and with fewer moving parts are likely to cost much less to service Plus they39re likely to have longer shelf life If properly promoted these points will help consumers offset the higher purchase prices And automakers need to start offering the kind of dealer services for EVs that they already extend to their other customers These can include concierge services and enhanced access to charging stations all benefits they can promoteAutomakers are giving lip service to sales training but they really need to ramp that up given the ignorance that39s evident through the Sierra Club survey and massive anecdotal evidence Plug In America the leading advocacy group launched a sales education initiative last year and hopefully the industry takes it up as a cause through NADAVisitors to company websites get a lot of flash and not much substance That can change as automakers turn their online assets into rich sources of information designed to allay consumer fears about EVs This is particularly important as consumers pivot to buying cars onlineThe ad strategy needs work Right now automakers are selling EVs like any other car with a focus on social interaction you39ll gain friends if you buy it lifestyle and performance For EVs they39re going to have to go back to actually putting specs and statistics like 400 mile range and the much lower operating costs that on average make EVs 860 a year cheaper to own Call it the Consumer Reports approach to marketing Kendall Smith senior director of business development at the Nielsen Auto Team suggests digging into the data for branding quotIf your company is not positioned to measure the impact of advertising social channels and viewing across all screens you will miss key opportunitiesquot he said quotIt39s imperative to understand what resonates in the mind of consumers from ad impressions for your first EV model to confirmed buyers at the bottom of the funnelquotMarketers are currently looking at the small number of EV buyers real and intended and deciding that ads if they create them should only run very selectively and cautiously But it39s precisely the mass market that needs to be reached with the quotEVs are good for youquot message That will mean keeping the big picture in mind On social pursuing the followers of greenminded celebrities makes sense Who owns a Tesla Ben Affleck Matt Damon Mark Ruffalo Zooey Deschanel Stephen Colbert George Clooney and many moreThe whole problem of marketing EVs will eventually become moot because when all cars are EVs around 2035 or so we39ll be back to the usual issues of simply marketing carsClick the social buttons to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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A New Paradigm for Selling EVs

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Jim Motavalli

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