Navigating the Slowdown: Accelerating through the EV Sales Slump
Electric vehicles (EVs) remain a pivotal component of the automotive industry’s future, yet recent slower-than-expected sales growth and shifting consumer sentiments have led many automakers to rethink their strategies. In January 2024, Tesla CEO Elon Musk acknowledged preparing for a “notably lower” growth rate – one of many signals that manufacturers needed to recalibrate their approach. This shift has prompted a more balanced inventory strategy, integrating gas, electric, and hybrid vehicles.
That begs the question … as manufacturers, dealers and even auto repair and parts retailers continue to support these various consumer options, are there ways to continue to maximize enthusiasm and sales within the EV market now? The short answer: Yes!
Revamping Marketing Strategies
The slowdown underscores the need for a shift in marketing tactics. Initially, EVs appealed mainly to environmentally-conscious consumers, but the market now demands a broader approach. Utilizing data and audience segmentation tools like Claritas PRIZM® Premier, automakers should adapt their messaging to highlight the full value of EVs while addressing practical concerns such as range anxiety, charging infrastructure, and overall cost of ownership.
Chart 1
In Chart 1 from PRIZM Premier, the index for importance when considering buying EVs seems fairly consistent across all factors. However, “cost” and “home energy spikes” top the list with younger age categories who form the core of the EV market. Messaging that specifically addresses these concerns could facilitate additional sales. And since younger consumers generally view EVs positively, focusing on traditional factors such as premium features and available styles is also crucial. With EVs now available in sports cars, SUVs, and pick-up trucks, automakers have increased opportunities to appeal to diverse segments.
This chart also shows that those in the over 55 age segments are not typically primary targets. But could they represent an opportunity for growth? Many potential buyers, particularly those in more mature segments, may still be unfamiliar with the benefits and practicalities of EVs that could appeal to them. Automakers should invest in educational campaigns directed at these audience segments to inform consumers about the advantages of electric vehicles, with particular emphasis on long-term cost savings and innovations that promote ease-of-use. Workshops, online resources, and in-dealership educational events could aid in demystifying EVs and help potential buyers make informed decisions.
Companies are also working on improving their digital presence and engaging with potential customers through online platforms. Virtual test drives, augmented reality experiences, and interactive configurators are becoming more common as manufacturers seek to provide an immersive and informative purchasing experience. Supplement this with digital marketing options that appeal to identified segments. This aids in supporting a total, multichannel marketing approach that enables you to reach and engage customers on different levels – such as social media, email, web, mobile, TV, radio, and print media – and expand your overall brand awareness. And don’t forget to follow this up with multichannel measurement and attribution analysis to determine which channels are most effective in converting.
See it in Action: A large auto manufacturer worked with Claritas to drive more efficient engagement with their website and shopping tools. After identifying key demographics and behaviors of key buyers of the brand and a successful CTV ad campaign, they tracked and measured the campaign using industry leading attribution and incremental lift methodologies. The results included a 3X lift in website visits and a +10% overall lift for CTV campaigns. Read the full case study.
One Step at a Time
Many consumers may not be ready for a fully EV world yet. In 2022, hybrids and EVs had similar market shares (5.8% and 5.2%, respectively). According to Edmunds, the total market share of conventional hybrid cars and plug-in hybrids grew to 9.1% in 2023 with the EV market only reaching about 6.9%. While demand for alternatives to gas engines continues to rise, hybrids have once again become a more popular option as Americans look for a compromise between gas-powered and fully electric vehicles.
Considering consumer demand and concerns, automotive companies should develop a nuanced approach for transitioning to EVs. This is especially true with lower income categories who will be looking for economical choices including used hybrids and EVs.
Chart 2
Focus on Innovation and Technology
To reignite enthusiasm for electric vehicles, manufacturers are intensifying their focus on innovation. This includes significant advancements in battery technology to enhance range and cut charging times, as well as exploring new materials and manufacturing techniques to lower costs and boost performance.
Marketing strategies should mirror this innovation by effectively showcasing and communicating these technological breakthroughs. Advanced marketing platforms such as the use of AI, will not only improve your marketing precision and success, but reinforce your brand’s reputation as a leader in cutting edge technology. Look for those with success records, such as the Claritas AI Optimization platform. In this case, messaging and creatives could be developed for each of the ”importance in buying” options identified in Chart 1. These options can be fed to the various targeted segments and optimized to reach the right audiences through the right channels, producing the optimal marketing ROI.
Claritas + AI: Insight-Driven Audience, Creative, Message and Media Optimization
Claritas’ Integrated Marketing Optimization Platform provides dynamic, real-time customer experiences that involve connecting with specific audiences and delivering tailored messages across a wide array of digital channels and formats – from audio and display to email and CTV/OTT video. The AI optimization loop consistently fine-tunes messaging, channels, formats, and even audience selection throughout the marketing campaign, ensuring the most optimal results. With our integrated marketing optimization platform, you get the right message to the right person at the right time.
See it in Action: Using Claritas’ AI Personalization, GM was able to enhance content relevance and optimize engagement based on their target audience profile. A total of 243 variations of creative ad materials were developed and the campaign resulted in a 68% increase in webpage visits. Read full case study.
Looking Ahead
As the world continues to grapple with climate change and sustainability issues, the role of electric vehicles remains crucial. The industry’s ability to adapt and respond to current trends will be key in shaping the future of transportation. The slowdown in EV sales presents both challenges and opportunities for the auto industry. While the immediate impact may seem daunting, the industry’s response reflects a commitment to innovation and adaptability. By diversifying offerings, focusing on technology, educating consumers and adapting marketing techniques, automakers can not only position themselves to weather the current slowdown, but thrive in a rapidly evolving market.