The race to market electric cars

Although Tesla is one of the best-known electric car brands on the planet, many automakers have marketing plans that include the introduction of electric cars.

Especially now that Tesla appears to be having difficulty consistently producing its Model 3 mainstream auto in sufficient quantities to meet its objectives, other automakers see real opportunity to gain market share with their own electric vehicles.

For example, Germany's Mercedes recently introduced an all-electric SUV, branded the EQC (for 'crossover'). The interior has many familiar features, including a robust infotainment unit.

Porsche is preparing its Mission E vehicle for 2019 introduction, with the goal of having plug-in electric and hybrid vehicles comprise half of all of its vehicle deliveries by 2025.

Volkswagen is investing heavily to develop and market electric cars in global markets. Chinese carmaker Geely is also gearing up to introduce more electric cars in more markets, including its recently-launched SUV crossover.

As a result, Tesla will face global markets more crowded with electric cars than ever in the past. How will it keep its production and its marketing plan on pace?

This post updates the Marketing in Practice example in Chapter 6 of my Essential Guide to Marketing Planning.

New regulations drive new auto marketing

The marketing environment can have a profound effect on brand and product marketing. Regulations governing car emissions are a good example.

From today, EU regulators have changed the rules on how car emissions will be measured, to prevent automakers from circumventing emissions limits. Most of all, the new rules are intended to improve air quality, for a greener future. In turn, these new rules are driving new vehicle marketing.

Now automakers are offering 'scrappage' schemes to encourage drivers to purchase new cars and 'scrap' or trade in older vehicles. Volkswagen is offering as much as £7,000 off to encourage UK buyers to turn in their old diesels (registered prior to 2010) and buy a new VW, Audi, Skoda or Seat model.

Ford is offering £2,000 off to UK buyers who exchange any brand of vehicle (model year 2010 or older) for a new Ford model. Kia and Renault are also offering the same amount for older models turned in when buying a new car in the UK. Toyota is offering up to £4,000 to encourage trade-ins of older cars by UK buyers.

Automakers are also designing new cars that will comply with emissions rules and appeal to environmentally-conscious buyers. Aston Martin has plans to have an all-hybrid product portfolio by 2020, and BMW will soon launch an all-electric version of its popular Mini. 

However, the UK's ambitious plan to not allow sales of new diesel and petrol cars from 2040 will strain the infrastructure for electric cars, requiring significant investments in recharging stations, for example. Automakers will be watching the environment carefully as they plan for future product introductions and car promotions.

Greenwashing: VW's reputation is at risk

Volkswagen, the world's best-selling car company as of 2015, has admitted to using software to manipulate testing for polluting emissions in its diesel-powered cars.

Many hundreds of thousands of vehicles are involved--and, just as critically, the reputation of this venerable automaker is at risk. VW has already dropped the royal warrant from its UK communications.

Being linked to greenwashing will damage any company in the short term. In the case of VW, which has long-term ambitions to remain the top-selling automaker on Earth, dealing with the scandal surrounding its diesel cars' actual pollution performance is complicated by customer claims, shareholder outrage and governmental actions. VW must now rehabilitate its brand and reassure stakeholders of its sincerity and commitment to fixing what's gone wrong.

In this age of social media and online news coverage, when negative headlines can flash around the world within moments, is greenwashing going to disappear? In the words of Nick Timon, chief innovation officer of marketing firm Adjust Your Set:

I don’t mean to sound glib – of course environmental consciousness is important, laudable and pressing – but the way many companies are suddenly developing a social conscience on this front smacks of insincerity and laziness, as if the industry has learnt nothing from the greenwashing debacle and instead is jumping gung-ho into the shiny new sport of ‘purpose-washing’.

VW gears up for the future

Volkswagen's iconic camper-van, above, is not going to be part of the German company's product line for much longer. Because of the difficulty of adding airbags to protect all passengers, the van is being dropped in favor of newer models and technologies that will help in the drive for future growth. This is part of VW's long-term goal of becoming the world's number one automaker by 2018.

China is VW's most important market these days, so the company is boosting production of the Golf and other models to meet projected demand. It's also investing more heavily in its existing joint ventures inside China, where the ever-expanding middle class segment has the income to buy new vehicles.

Meanwhile, European car sales have been slow but as the economic recovery continues, volume is likely to rise. Thanks to VW's large portfolio of brands, it remains Europe's top-selling car company. Its truck brand, Scania, reports healthy sales as fleet operators get ready for stricter emissions rules.

Like other automakers, VW is increasingly active in engaging car buyers through social media. Its UK website has links to Facebook (404,000 likes), Twitter (63,000 followers), YouTube, and Flickr. VW US has a popular Pinterest board, as well.