Brand recognition vital in EV market as manufacturers vie for position
28 June 2017
28 June 2017
Electric vehicle (EV) manufacturer has been making gains on traditional car makers in the world of brand awareness, despite shunning regular advertising.
Tesla, the US-based carmaker, has developed a strong brand, with agencies believing the company is now more valuable than Land Rover and Porsche. While the company has yet to break into the global list of 100 top brands globally, but in a separate list of automotive companies, Tesla places eighth.
In its recent annual report, the company states: ′Historically, we have been able to generate significant media coverage of our company and our vehicles, and we believe we will continue to do so. To date, for vehicle sales, media coverage and word of mouth have been the primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs.’
The promotion of the brand is also a promotion of EVs themselves, a technology that has been pushed by a number of manufacturers in recent years with others beginning to build their own ranges. However, a company that focuses solely on one type of vehicle technology is able to build itself around that and promote itself as being able to make people’s lives better while spearheading an environmental change.
However, while raising brand awareness is good in the build up to a new model launch, it puts added pressure on the company to ensure its product can meet the high expectations that are associated with it. In 2018 the company launches its much anticipated Model 3 as it pushes to go mainstream. Over 115,000 pre-orders have been made online for the vehicle, based on the brand and its awareness. The risk is if the car does not live up to its hype.
The company is taking risks to ensure it can deliver the Model 3 on time, skipping prototyping of tooling in its manufacturing facility to go straight to production. Founder and CEO Elon Musk believes the Model 3 rollout will help the company deliver five times its current yearly sales volume, which will help it stabilise expenditure and increase market value, a figure which has already surpassed that of Ford.
Meanwhile, Porsche has revealed that it wants half of its model line up to be running on electric power by 2023. The first in the plan will be the company’s Mission E, set to arrive in 2019, however more will follow over the following years, including a crossover coupe, both of which will be built at the company’s new Zuffenhausen electric car production facility, capable of manufacturing around 60,000 units annually.
The German manufacturer is also deciding whether to release its next Macan model, due in 2022, as an electric only vehicle. With this currently leading Porsche’s charge as its most popular model, it would be a big move to produce it without a petrol or diesel variant. However, the company’s sports models, including the 911, will remain free from electric power. The company also plans to move away from diesel engines completely in the US.
The development of EVs is causing component suppliers some problems however. German supplier Schaeffler has slashed its annual profit guidance citing increased expenses for developing electric cars as one reason. The company said that earnings in Q2 2017 were substantially lower.
The company provides manufacturers with combustion engine parts and therefore has the highest exposure to any change in technology, while also needing to diversify in order to be able to offer EV components.
Schaeffler CEO Klaus Rosenfeld said a shift toward EVs had forced the supplier to build many more prototype components, hiking research and development expenses, while facing higher prices elsewhere.
He adds: ′What is new is that we were not able to compensate by lowering our production costs. This comes amid higher steel prices for certain products in the transmission area.’
Photograph courtesy of iStock
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