Since Elon Musk took a controlling share in Tesla more than a decade ago, electric vehicles have steadily grown in popularity.
Following such growth, advertisers in the E.V. industry (vehicles and chargers) have increased their budgets considerably.
Through Q3 2022, these advertisers have collectively spent $228mm, representing a 143% YoY increase from the same time in 2021 when they spent $94mm.
That’s not surprising, given the industry’s growth.
However, it is surprising that advertisers decreased their spending in Q3 by 29%.
While spending from electric vehicle advertisers still increased YoY, the sudden decrease came at an odd time.
At the end of August, California introduced new state regulations requiring all new cars, trucks and SUVs sold to have zero emissions by 2035. For automakers that weren’t on the E.V. bandwagon, this all but punched their ticket.
President Joe Biden also announced an investment in electric vehicle charging stations around the same time.
Still, the E.V. industry is doing just fine.
Although challenges remain, everything’s trending up, including spending from these advertisers—the spending just isn’t coming from the company you likely expect.
The electric vehicle industry is in a constant state of expansion.
Ford, for example, announced earlier this year that it’d increase its investment in electric vehicles to $50b and continue operating its E.V. unit separately from its legacy combustion engine business.
But no matter how big the industry gets, its roots will always lead back to one company: Tesla.
According to Cox Automotive’s Q3 U.S. Auto Sales Report, Tesla dominates the E.V. industry, with four of its models collectively securing more than 64% of the market.
While Tesla has hit bumps in the road that have altered its ride to the top, including concerns with its autopilot software, there’s no denying that the company has done almost everything right.
One thing it hasn’t done—at least not as much as you’d think—is advertising.
Through Q3 2022, six E.V. manufacturers were responsible for 94% ($213mm) of the industry’s ad spending.
Tesla wasn’t one of them.
Instead, advertisers from Hyundai, General Motors, Lucid Motors, Moke America, and Volkswagen pushed the industry forward.
Hyundai, for example, increased its ad investment by 16x through Q3 to promote its Kia EV6, collectively spending nearly $11mm over 224 properties.
Meanwhile, General Motors increased its spending by 62% YoY to promote the Chevrolet Bolt. The company also introduced the Chevrolet Blazer EV and leaned 100% into digital advertising across 365 properties.
With the high sticker price of many electric vehicles remaining a prohibitive factor, Chevrolet’s more affordable models will likely warrant an increasing amount of ad dollars moving forward.
For these legacy automakers, including Volkswagen, the spending is a concerted effort to stop Tesla from eating further into the market but also a way to keep other competitors at bay.
One of those competitors is Lucid Motors.
Through Q3, advertisers at Lucid increased their spending on its Lucid Air by 54% YoY. Overall, they decreased their investment in print by 78% YoY while doing the opposite with TV (up by 43% YoY). Digital ads were part of Lucid’s strategy as well.
While Lucid reported Q3 losses, the company also confirmed it’s on track to meet production guidance. Add to that an announcement about increasing the size of its Air electric sedan lineup, and it’s leaving little doubt that there’s still room to play in Elon’s world.
Moke America, a relatively new entrant, also increased its investment through Q3 (up by 67x).
Wallbox Puts a Charge into its Ad Strategy
There are more than 46k public E.V. charging stations in the U.S. and more than 115k individual charging ports.
Tesla owns many of these charging stations—there are more than 35k Superchargers in the U.S. Historically, those have only worked with Teslas—but that’s changing as Tesla opens its ecosystem to other companies, leaving a void that the likes of ChargePoint, Wallbox, EVGo, and Blink Charging have filled.
Despite the relatively steep competition among the aforementioned E.V. charging companies, only one is really investing in advertising: Wallbox.
Through Q3, 86% of the spending from these advertisers came from Wallbox, which made a name for itself when it kicked off Q1 with a Super Bowl ad.
Overall, the 40 E.V. charging advertisers who did spend in 2022 increased their spending in Q1 and Q2 by 375% and 611% YoY, respectively.
That said, spending from these advertisers was down by 6% YoY in Q3, likely due to a similar pullback from car manufacturers, but also the end-of-August announcement asking California residents to avoid charging electric cars amid an intense heat wave.
A Fight for What’s Left
As popular as electric vehicles are today, they still make up a fraction of the total automotive market. To put this into perspective, E.V. sales accounted for just 5.6% of the total market in Q2.
Still, the market is primed to boom as society remains committed to the environment.
Legacy automakers and startups will continue to pour big dollars into R&D and ongoing innovation to make these cars more accessible to the masses. In fact, worldwide electric vehicle investments are expected to grow to more than $626b by 2030.
Ford Motor Company is at the heart of this innovation. In September 2021, the industry giant announced plans to bring electric vehicles at scale to American customers with two new campuses in Tennessee and Kentucky.
More recently, Nikola, the electric and hydrogen truck technology company, reported better-than-expected third-quarter sales and is ramping up production.
As the E.V. world fights for market share in 2023 and beyond, nearly all major players will invest heavily in ad strategies.
That said, unless something extreme happens, Tesla won’t be one of them—Elon does plenty on his own to keep the company on the front pages
For more insights, sign up for MediaRadar’s blog here.