How Brand Perception matters in EV?
This article is a summary of a ClubHouse discussion organised on June 16th 2021. List of the Speakers at the end…
➡️ This discussion focused on full Electric Vehicles and was not considering Hybrids. The subject is very complex and a lot of different views and opinions have been shared. The cultural importance of cars is very different from one country to another and is influenced by the presence of national car manufacturer(s) (Germany is very different from Ireland). Car purchase is something very specific because it implies much more emotions than the purchase of most other objects (such as a phone, a computer or home appliances). In some cases, the emotional attachment can be strongly linked to a specific brand.
➡️ The top brands for EV sales are: (1) Tesla; (2) SAIC; (3) VW; (4) Hyundai; (5) BYD. Tesla looks like a “special case” and is the undeniable leader. Other major players are an interesting mixture of traditional brands (VW) and relatively new players (BYD). This list is a wide mixture of nationality with American (Tesla), Chinese (SAIC; BYD), European (VW) and Korean (Hyundai) companies.
➡️ “Brand perception” must be differentiated from “Brand loyalty”. Brand perception is the image, the idea, the feeling that people get about a brand. Brand loyalty is something much stronger and can be defined as “hardcore fans” of a brand. Some automotive manufacturers (OEMs) are relatively general. Independently of their origin countries, some brands have been able to create a core of fans that will not move away from their favourite brand before a very long time. Example of strong brand loyalty are Ford or BMW; while NISSAN or Fiat cars appear more “neutral”. From this point we can ask ourselves 2 questions:
Speaking of “brand loyalty”, how can car manufacturers make their fan switch from traditional IC Engines to EVs?
Speaking of “brand perception”, how decisive the “brand image” will be in the purchase choice of a vehicle once the decision of going electric has been made?
➡️ A very good example of brand loyalty is the launch of the all-electric Ford F-150 Lightning in the USA. The F-150 is a symbol by itself: it is the most popular vehicle and the standard expression of the American dream. The fact that Ford proposes its F-150 with an Electric powertrain is a true revolution. In this case, we have an example of how brand loyalty can influence EV perception of the general public.
➡️ Brand perception is also linked to the image and the marketing choices of car manufacturers. Some brands can be described as sporty, posh, luxury or even “crap”. Outside of these emotions, leadership in electrification is more or less advanced depending on OEMs. When talking about EV technologies, it seems easier to be a fully new player such as Tesla, NIO, Lucid, RIVIAN, etc. On the one hand, these brands have no alternative to speaking about EVs because it is their only possible branding approach: if they cannot be convincing enough about their EV and Battery knowledge, they are doomed to fail. On the other hand, most traditional OEMs have entered the full EV market relatively late (compared to Tesla at least) and seem to struggle showcasing their EV technologies as most of them are still in a position of followers. Chinese brands seem different and their switch to electrification has been extremely sharp and rapid (as usual with China).
➡️ Brand image and perception is also very dependent on the segment. Sport segment (Porsche Taycan, for example) is not viewed in the same way as a more general segment (Renault Zoe, for example).
➡️ It is very interesting to analyse how OEMs advertise, opposing traditional media (journal, TV, etc.) and Social Media (Instagram, YouTube, TikTok). In particular, Social Media are key to target Generation Z and grab the attention of future generation customer. Some OEMs have started official TikTok accounts (Mercedes or Lamborghini, for example) and nearly all of them daily advertise on their Instagram (BMW. Porsche, AUDI…). Without entering in the details, it is very obvious that traditional / old OEMs struggle in understanding Social Media.
➡️ Brand perception and image also starts to be merged with their leaders’ image and at this game Elon Musk is the master. You can clearly see that the Volkswagen Group has started to play in this direction with Herbert Diess constantly popping up on Twitter or on LinkedIn or Stephan Winkelmann reproducing this business model for Lamborghini. Is that a coincidence that the 2 western leading EV brands (Tesla and VW) are pushing so strongly on Social Media?
➡️ Motorsport is also an important way to promote EV leadership. Again, the strategy is very different from one car manufacturer to another. Yet, all existing FIA events so far are too homogeneous in terms of battery and other EV components to really support a strong manufacturer competition and create a true fan base (see previous OROVEL-clubhouse discussion “EV Motorsport 🏎️⚡ Dilemma: Bold Developments vs Safe Bets”
➡️ Building a good car is not only about e-motors and batteries. It also requires knowledge and experience in a lot of other fields such as chassis, suspension, interior, car design, etc. In this case, traditional OEMs benefit from their long experience in reliability, maintenance and replacement.
➡️ In addition to the vehicle itself, car brands and OEMs in general imply a full ecosystem and business model which is very complex and also participate to the brand perception. Among this ecosystem, we can cite: car dealers and garages, purchase system, etc. In the case of EVs, the business model becomes even more complex because you will add Apps for charging points, payments, etc. + the home-charging infrastructure itself (for example, VW proposes its own wallbox). This support can appear decisive in the purchase of an Electric Vehicle.
➡️ EVs are generally-speaking more expensive than traditional vehicles not only for their powertrain but also because of the frequent combination with other high-tech add-on such as infotainment, futuristic electronic dashboard, multiple add-on for passengers and sometimes some driving assistance options (sometimes wrongly called autonomous driving). Obviously, the choice of a specific EV or the willing to purchase an EV rather than a thermal engine may also be driven by this high-tech perception. When talking about electronic components, Chinese OEMs have a clear advantage in know-how.
➡️ EVs but more generally modern cars with more and more electronics tend to register more and more data that they share with OEMs for various reasons (vehicle control, maintenance, warranty, legal potential litigation, etc.) and concerns about data sharing and data privacy are rising. No doubt that this topic will raise questions in the future and that may play a role in car brand perception (as it is already a hot topic in phone branding).
➡️ Interestingly, it seems that advertising (especially on social media) and promoting high-tech are becoming more decisive than the "green image", probably because all brands now promote EVs as green and it is not a differentiation criteria anymore. "Locally - produced" seems a strong raising argument because people are worried for their local economy and jobs. For example the Renault Megane - E proudly promote "made in Douai" (Douai is a town in France with a strong car manufacturing history).
➡️ In the future, brand perception will add another dimension in the EV landscape because soon the impact of the second-hand market will play a crucial role in the ecosystem. It is likely that well-known EV brands will keep their market value longer (and in this Tesla is already showing strong arguments).
➡️ On the other hand, Chinese OEMs seem to position themselves to target Europe in the near future. One can argue that Chinese car manufacturer sales are still limited in Europe but their initial positioning in direct competition with brands such as Tesla or VW need to be taken seriously.
Thanks to the Speakers:
Dr Veronika Wright, Expert in Battery and presenter of the YouTube channel Electrified Veronika
Andrew Halonen, Consultant at Mayflower Consulting
Tu Le, Expert mobility, smart cities and Chinese Automotive market
Don Wright, former Head of Department for Electrification and Racing Test Systems at AVL
Dr Fakhry Abuzahra, product Engineer at Systemair France
