Electric Vehicles Are Coming. But Where Are They Going?

How Core Consumer Values Are Influencing the Evolution of Electric Vehicles

The automotive industry is on the brink of a major transformation and “there’s no turning back,” according to current President Joe Biden. One of the things driving this shift is the emergence of the electric vehicle (EV). For the first time since the dawn of the 20^th century, the value associated with internal combustion engines is being challenged by technology that cannot be ignored. It’s not a matter of “if” anymore, rather “when” EVs will overtake the market and become the norm for new vehicle owners across America.

This year, electric cars dominated the commercial breaks with eight different electric vehicle (EV) commercials during Super Bowl LVI. Recently, GM announced plans to retire combustible engines by the year 2035. And according to Autonews.com, there are nearly 100 EVs headed to the U.S. through 2024. It’s expected that EV sales in the U.S. will grow from around 500,000 vehicles in 2021 to over 4 million in 2030.

This seismic shift offers opportunities for auto companies both new and established to extend their brand image and broaden their appeal to new customers. But who are these EV buyers? What do they value in an EV brand? And how do they decide which EV to buy? The majority of them belong to a powerful consumer super group we call the New American Middle (NAM).

The NAM is responsible for over 50% of purchasing power in the U.S. and EV auto manufacturers that modernize their marketing strategies to serve their wants, needs and values will quickly surge ahead of their competition in grabbing their share of the EV market.

New American Middle Values

For over five years, we have studied, assessed, curated, and done numerous deep dives from various data sources to understand what values influence the NAM for our clients. How do they feel about “big” brands, bargains, convenience, authenticity, transparency? Is how they see the world important to them when it comes to supporting a brand? The answers are complicated, but at their core, the answer is YES. The NAM is devoted to supporting brands that support their values. And while they continue to evolve, the way they choose what to buy and where to buy continues to be deeply rooted in their 4 core values: family, community, faith and sustainability.

EV brands that appeal to one or more of these values, and then reflect them back to their audience through modern and innovative marketing, are the ones that will ultimately convert the New American Middle audience. EV brands that don’t, will miss out on a once in a century opportunity to gain the business and ongoing loyalty of the multitude of new EV buyers across the country.

How Will the NAM Choose Which EV Brands to Support?

The NAM expects a fair price for quality goods, but this does not necessarily mean the lowest price. Unlike previous generations, the purchases they make are influenced by much deeper convictions than the bottom line. The NAM pays attention to a brand’s place in the world. Do they treat their employees well? Take a stand for diversity, environmental sustainability, worthy causes? Do they care about the health and safety of their products? With more choices than ever before, these are the types of differentiators that will sway EV customers to choose one brand over the other. They can’t save the planet by themselves, but they can support responsible brands that align with their beliefs.

The Race to Win EV Dominance

The race to be a frontrunner through electrification of vehicles has many players, including both long-established giants and new disruptors. Ford and Tesla are already trading blows and General Motors and the Volkswagen Group are both in it to win it. California startup Tesla already has hundreds of thousands of devoted fans, millions of cars on the road, and they are likely to become the first ground-up U.S. carmaker to survive in almost 100 years.

Over the next decade, there will be clear winners and losers, and although the quality of the EV vehicles themselves is important, winning the hearts and minds of new consumers with smart marketing strategies that plug into what people really want from an EV is even more important.

So how are top EV brands doing on the road to accelerate sales in relation to the values of the NAM? We decided to take a look at some of the many contenders:

Tesla has made quite an impression in the EV market these past few years and Elon Musk has now become a household name (thanks in large part to his other company SpaceX). Surprisingly, you won’t see any Tesla commercials or static advertisements for EVs, but make no mistake, they DO have a marketing strategy that has helped them currently dominate the market, surpassing Toyota, Volkswagen, and even BMW. So how did they gain over $31 billion in EV revenues? Here are just some of the ways Tesla appealed to the values of the NAM:

• Made it their mission to accelerate the world’s transition to sustainable energy – the NAM is highly eco-conscious, and when given a choice, they almost always prefer to support brands in line with their ethics.
• Used market segmentation to ensure that they were reaching the right NAM audience where they live (which is mostly online).
• Appealed to the NAM’s desire to support a company with an ethical leader, all hail Elon!
• Made transparency a core value of their company – the NAM mistrusts big companies that they feel are hiding things from them. Tesla’s openness in sharing what they do and how they do it has built trust.
• Made the buying process easy – convenience is important to the NAM, even though it is not a core value
• Built a sense of community among their buyers and offered them after-the-sale service and rewards for bringing in new customers – very important to the NAM to have a sense of belonging and to be appreciated (that’s all any of us want, right?)

Hard to believe, but for 20 years, Toyota rejected the very idea of EVs. The world’s most profitable large automaker argued that its gas hybrids would be the most efficient way to slash vehicle emissions. But when California startup Tesla emerged a few years later, the game changed fast. While Toyota’s investment in hybrids did pay off, it didn’t do anything to help make them an EV leader. In fact, Toyota currently trails most other EV manufacturers. Here’s what they’re doing from a marketing perspective to try to catch up and how it aligns with the NAM:

• Announced $70-billion investment in EVs that tops that of any other OEM – this commitment made waves in the financial press and the NAM surely noticed their dedication to join the EV world.
• Committed to two new technologies: “Carbon-Reducing Vehicles”—presumably hybrids that reduce the CO2 per mile of gasoline transportation—and “Carbon-Neutral Vehicles.” Even though these aren’t all complete EVs, to the NAM, they still represent “the greater good”.
• Invested $1.3 billion to build a battery plant in North Carolina – this commitment shows the NAM that they are putting their money where their mouth is.
• Diversified their electric vehicle offerings to include Hybrid, Plug in Hybrid, Fuel Cell Electric and Battery Electric – not all NAM consumers want the same thing. Offering a range of eco-wise choices will help them attract multiple NAM market segments.
• Provided You Tube videos sharing features about specific models and helpful tips on how to operate and charge their EVs, appealing to the NAMs sense of ongoing help and “a caring community” from the brands they choose.

Subaru Corp. has lagged behind in the EV revolution, but is working to step up its pace in the battery-car race by adding a dedicated in-house EV assembly plant in Japan by 2027. The move is part of a multibillion-dollar investment in electrification over the next five years.

While Subaru released the Crosstrek Hybrid, they had not brought a fully electric vehicle to the market until this year. The “all-wheel drive” specialist is finally turning its focus to full-EVs after introducing its first serious contender, the Solterra crossover EV, only this year.

Subaru’s first electric vehicle is actually Toyota’s second EV (remember the RAV4 EV?) with some tweaks. It is even produced by Toyota, something that Subaru wants to change by the middle of the decade. That’s when Subaru is planning to make its first EVs. By 2027, it will have its first dedicated factory for electric cars. To attract the NAM, they are hanging their hat on the Solterra for now, but have committed to the following in the future:

• Working to make 40% of the vehicles it sells electric vehicles or hybrids by 2030 – this is not as strong of a promise as other EV brands, but for the NAM, it is still a step in the right direction to help “save the planet”.
• Promises to reduce wheel-to-wheel CO2 from all new vehicles by 90% come 2050. The reference point will be 2010 CO2 levels from new vehicles, which is a dramatic decrease - the kind of decrease that makes the earth-loving NAM happy.
• Building on existing branding with statements for their Crosstrek including NAM-friendly phrases such as “Smartly powered for modern adventure”
• Partnering with STARLINK to offer a new “Charge Finder” app making it easier for the NAM to find nationwide charging stations, including location, charger availability, charging rates, charger compatibility, and hours of operation.

Ford Motor Co. is revving up plans to compete with its EV rivals by creating Model e, a new business unit within the company dedicated solely to EVs. “Model e will be Ford’s center of innovation and growth, a team of the world’s best software, electrical and automotive talent turned loose to create truly incredible electric vehicles and digital experiences for new generations of Ford customers,” said CEO Jim Farley.

Ford expects to be selling at least 2 million electric vehicles annually within four years, intends to spend $5 billion in 2022 to build up its capacity to produce electric models, as well as the battery packs, motors and key components they’ll need. The company is racing to double production of their fast-selling Mach-E, a rival to Tesla’s Model Y, to 80,000 units in 2022 and boost the annual production target for the F-150 Lightning to 150,000 units from an earlier 80,000-truck goal. Ford has said it has orders for hundreds of thousands of the battery-powered pickups. So, what are they doing right through the lens of the NAM?

• Personalizing strategic marketing for individual dealers with deep data dives that help them glean insights that drive local sales – the NAM appreciates when brands single them out and seem to know what they want – it’s personal, in the best way.
• Investing $22 billion in electrification through 2025 as part of its plan to lead electrification – a huge commitment that aligns with NAM values to keep the earth moving in a green direction.
• Offering zero-emissions versions of its most popular vehicles and harnessing electrification to deliver more of what NAM customers already love about them: performance, capability and productivity.
• Providing a variety of home charging solutions, in addition to North America’s largest public charging network (more than 63,000 charging plugs and growing) – very NAM convenient.
• Innovating built-in charging solutions, such as cloud-connected navigation that routes customers to nearby charging stations, recommend where to charge on trips and provide easy access and payment via FordPass for a seamless customer experience –right in line with the NAM’s eco-friendly vision of a better world.

NOTE: Ford also invested heavily in Rivian, an electric truck maker, but they have had a rocky relationship since 2019. Read the latest on their partnership here.

Polestar, a Swedish premium EV automaker, was established in 1996 by Volvo Cars' partner Flash/Polestar Racing and acquired in 2015 by Volvo, which itself was acquired by Geely in 2010. It is headquartered near Gothenburg, Sweden with vehicle production taking place in China.

Polestar’s branding is built on the Volvo tradition of Swedish minimalist design and relies on its Chinese parents for vehicle platforms, electrical architectures, and manufacturing. But they are not going under the umbrella of Volvo (who has its own EV lineup). Instead, Polestar will be a separate brand. So why would Volvo do this instead of converging efforts into its own electrification path? The answer lies in its branding tagline “No legacy, no ties to the past. Free to find the right way”. This “maverick” approach appeals to many, including the NAM, who are tired of big corporations red tape, regulations, and policies that squelch innovation.

Since 2020, GM has remained focused on its vision of an all-electric, zero-emissions future with a commitment to 30 new global EVs by 2025. They are aggressively going after every aspect of the EV ecosystem with the goal of putting everyone in an EV. GM is positioned to design, engineer, and produce EVs for every style and price point, and they are rapidly building a competitive advantage in batteries, software, vehicle integration, manufacturing and customer experience.

The company has rolled out several updates on its EV programs. And they have done a stellar job of promoting their EV vision as part of a multi-brand, multi-segment strategy to prove their commitment to a fully-charged future with over 1 million EVs on the road by mid-decade.

Here are just some of the strategies they’ve implemented recently to build confidence with consumers (including the NAM) and to show they are not just in the game for the EV revolution, they are all about it.

• Announced a plan to invest $35 billion in EVs by 2025 and 30 new global EVs by 2025 and 30 new global EVs by 2025 – a solid amount to gain the confidence of the NAM and other global customers.

• Unveiled the all-new Cadillac LYRIQ showcar; Cadillac’s first fully electric EV – a car that appeals to an important segment of the NAM that appreciates quality and convenience.

• Shared next steps with Honda to develop future electric vehicles that will leverage GM’s Ultium battery system, research and development, and other advanced technology – the NAM likes the idea of “sharing” for the greater good.

• Collaborated with independent charging providers, electric utilities and government agencies to make home, workplace, public and fleet charging ubiquitous and easy for customers – working together for the greater good is a top trigger for companies the NAM wants to support.

• Developed mobile apps across their product brands to provide an intuitive mobile experience that makes navigating to an available charging station, plugging into a charger and paying for charging simple – who doesn’t want products that make their life easier?

Revealed the first all-electric supertruck, the GMC HUMMER EV, which will be powered by GM’s all-new Ultium electric propulsion platform – shiny, new, cool and eco-friendly. And it’s a TRUCK? Sign up the NAM.