• The media closely follows the automotive industry’s long journey towards reinventing itself against a backdrop of slow sales, an ongoing US-China trade war, Brexit and new European emissions regulations.
  • For some companies, such as Volkswagen and Hyundai, the electric revolution is an opportunity to reposition their brands and to communicate innovation and social responsibility.
  • While many manufacturers bet on clever marketing techniques to convey their electric credentials, Tesla still has higher brand awareness than any other EV maker without relying on any conventional corporate communication methods.

In the public eye, electric cars are cool, special and futuristic: quite naturally, every time a major automaker launches an electric model, it receives a fair share of media attention. Most media outlets unanimously claim that the rise of electric vehicles (EVs) is unstoppable and is actually happening faster than even their most ardent supporters ever expected, as most manufacturers see electric vehicles as integral to the future of their businesses.

The most commonly cited reasons behind EVs’ market growth have been their environmental friendliness and the fact that they boast superior efficiency to their internal combustion engine (ICE) counterparts. These factors have made the world’s leading car manufacturers seek quick routes to repositioning themselves as electric leaders. As they can no longer rely on making announcements to pacify the public clamour for them, they have started a fierce race for market dominance by intensifying production plans.

The media conversation has traditionally focused on the developments in Europe since the pressure from investors has in general been stronger there. The political climate in Europe continuously points towards clean energy, as exemplified by the 2019 European elections, after which the Greens became a substantial political force. For example, in Germany, Europe’s auto hub, companies such as Volkswagen, BMW and Daimler have pledged that as much as 25% of their fleets will be electric by 2025.

The media discussion in both Europe and the US really took off in 2015 when the landmark Paris Climate Agreement was introduced in a bid to reduce net emissions to zero by the end of the century. Since 2016, many publications have been concentrating on companies making deals in clean energy and areas such as carbon capture, utilisation and storage (CCUS).

But the media discussion recently shifted its focus on China, the world’s largest auto market, which is perceived to be winning the race to dominate EVs and is set to have a 57% share of the EV market in 2030, according to the International Energy Agency. About five million electric vehicles were sold in 2018, representing a 63% increase over 2017, mostly in China, followed by Europe and the US.

2030 is also the year when many predict a sharp drop in oil demand, while EVs are expected to account for 50% of all new passenger-vehicle sales by 2032, and for 50% of all vehicles on the road by 2035. The International Energy Agency forecasts that upcoming regulations on carbon emissions will mean that the need for electricity will grow much faster than that for oil. Most business outlets interpret such forecasts as worrying for fossil fuel investors, who would need to redirect their investments towards green energy.

The prevailing opinion circulating in the media is that the “oil age” will come to an inevitable end and that the future low carbon economy will compel the oil giants of today to transform into the energy giants of tomorrow.

Alongside stronger government action, increasing demand from investors and growing consumer awareness, the emergence of electric vehicles have made sustainability a central strategic priority for major oil companies, leading to a re-evaluation of business models, portfolios and operational practices.

Such opinions have also been voiced by prominent corporate representatives – for instance, Amin Nasser, the CEO of Saudi Aramco, the world’s largest oil producer, said that the oil industry faces a “crisis of perception” and there’s a growing risk the financial community will turn against fossil fuels: “There is a worrying and growing belief among policy makers and regulators, investment houses, NGOs, and many others that we are an industry with little or no future.”

But more conservative-minded publications seem to be more reserved, saying that the low carbon economy will not come so soon and that it will take time for alternative energy to deliver the profits oil investors are used to. Investment in oil and gas will remain vital even if renewables take up a larger portion of world energy consumption.

However, green energy seems to be winning in the court of public opinion. Even in the US, the hotbed of climate change denial, the majority of citizens across the political spectrum are in favour of expanding alternative energy sources, as the Pew Research Center has found. In the UK, the government’s Public Attitudes Tracker has indicated that support for renewable energy has climbed to 85%.

These sentiments align with the deteriorating reputation of the oil industry. According to an EY survey, just 37% of adults and 33% of teens trust the industry to do the right thing, and even though most consumers think the sector is important for the economy, they see it as a problem causer, not a problem solver. In addition, 76% of industry executives expect the public to not trust the sector and give themselves lower marks for communicating with the public, particularly around regulatory issues.

For more on this topic, read our analysis “Big Oil and Sustainable Energy: Sowing the Seeds of Green Reputation”.

The conversation around EVs was amplified by the growing interest in climate change expressed by both liberal- and conservative-minded media outlets. Climate change and global warming have become powerful coverage drivers not only in ecological and scientific discussions but also in political, economic and cultural analyses.

In addition, the messaging of a new wave of climate activists such as 16-year-old Greta Thunberg has given an unprecedented vehemence to the climate change media debate, engaging politicians and corporate representatives from various sectors. Having inspired a large number of school-aged adherents to launch their own school climate strike movements, Thunberg’s influence was dubbed by several media outlets as the “Greta Thunberg effect”.

The new wave of activism spearheaded by Thunberg made many companies take a more active part in the climate change debate by communicating corporate social responsibility. This has started translating into a gradual shift in corporate behaviour against a backdrop of a significant rise in sustainable finance or Environmental, Social and Governance (ESG) investing – a way of investing which takes into account not only the potential financial returns of an investment but its social impact as well.

For more on this topic, read our analysis “The Greta Thunberg Effect: Can Climate Activism Influence Corporate Behaviour?”

But while EVs are generally seen as one of the solutions of climate change, some publications warn that the burgeoning sector may be facing environmental, commodity security and tax revenue issues. For example, a major environmental issue is battery disposal – regulators are yet to decide the best ways of disposing of old batteries.

Another battery-related problem is sourcing their materials, which could create a new dependence on lithium and cobalt – materials produced in just a few countries which in turn could become the only players in the market, shrinking global competition. A further issue is how to compensate for the loss of petrol and diesel taxes.

From a consumer perspective, the wider EV availability from mainstream brands continues to push awareness. But along with the growing awareness, there are concerns over EVs’ range, their high prices relative to gas models and a lack of charging infrastructure. The main reason many still avoid EVs is their overall driving range, which is still not the same as gas vehicles.

But the consumer perception of the price gap between EVs and internal combustion engine vehicles is inaccurate and has been identified as one of the key areas of educational opportunities. As a study by Cox Automotive found, managing such consumer misconceptions would lead to greater market acceleration.

Electrobrands

We analysed the media conversation around EVs from October 2018 to October 2019 in the top-tier English-language publications to find the most often mentioned brands:

Unsurprisingly, Tesla leads the way as its brand has become synonymous with innovation within the EV market. Tesla has higher brand awareness than any other EV manufacturer and is set to remain in this position, despite the fact that almost 100 new electrified vehicle models are coming soon to the US market

A few years ago, AdAge named the company one of “America’s hottest brands” in a special report. Business valuation consultancy Brand Finance found that Tesla recorded extremely strong brand value growth over the last year, rising from 30th to 19th place amongst automobile brands globally, with a brand built upon the premium styling and a growth-focused corporate vision.

The interesting thing is that Tesla managed to build such a strong brand without depending on conventional advertising but rather relying on word-of-mouth recommendations. As Tesla CEO Elon Musk told AdAge: “Our owners become our ambassadors.”

Tesla is also the most Googled car brand by Americans, as per a Marketing Daily report, which supposes that this could be in part due to all the negative press surrounding the brand. Indeed, Tesla and Elon Musk are having a hard time getting basic, neutral, balanced press coverage.

The news around Tesla often include words such as “troubles,” “struggles,” and even “doomed”. The media narrative around the company often claims that demand is falling and its balance sheet is bad, and that it will ultimately disappoint investors. In reality, the brand has done well in ramping up its Model 3, while outselling its competitors, having hundreds of thousands of pre-orders, selling the cars with the lowest likelihood of injury and receiving good reviews by analysts and test drivers.

Some commentators have attributed the bad headlines to PR campaigns attacking electric cars, mainly sponsored by representatives of the oil industry who are now focusing their efforts on curbing electric car sales by spreading misinformation and lobbying against tax credits.

These allegations are building on the already existing reputation of the oil industry as a funder of climate change denial. Oil majors have been historically criticised for setting up denial campaigns to promote climate change skepticism. Such strategies have been compared to the tobacco industry’s denial of the dangers of smoking. There are even suggestions that Big Oil and Big Tobacco used the same scientists and publicists to downplay the public health dangers of their products and operations.

For instance, it was revealed that ExxonMobil, the world’s biggest oil company, knew about climate change since at least 1981, seven years before it became a public issue, but nevertheless spent millions over the next 27 years to promote climate change denial. Shell was also accused of spreading disinformation despite being aware of the risks of global warming.

A new report by non-profit organisation InfluenceMap claimed that since the Paris Agreement was signed, ExxonMobil, Royal Dutch Shell, Chevron, BP and Total have invested over $1 billion of shareholder funds in misleading climate-related branding and lobbying. According to another analysis by the Guardian and InfluenceMap, oil companies are spending millions of dollars on specific local campaigns, even though their global PR campaigns on social media promote a commitment to a low-carbon future.

And DeSmog UK, an environmental organisation dedicated to “clearing the PR pollution”, suggested that many critics driving the attacks against Greta were part of an established network of radical free-marketeer lobby groups which has connections with the fossil fuel industry and funders of climate science denial.

Another explanation for the negative coverage has been that the PR campaigns attacking Tesla were funded by firms which are shorting the car maker’s stock (TSLA). Last year, TSLA became the most shorted stock in the USA, and Elon Musk pointed out the links between one of his most vocal critics, Linette Lopez of Business Insider, and Jim Chanos, one of the most aggressive of Tesla short-sellers.

The brand has also been criticised by fund managers including Jim Chanos, who it seems clear previously manipulated the perceived solvency of Fairfax to drive them out of business, David Einhorn and Mark Spiegel, who are shorting Tesla’s stock.

There’s also the conspiracy-like $TSLAQ tag on Twitter used by Tesla shorters which bet that the company will crash and burn and are said to pressure the media to cover their negative opinions. But a growing number of commentators have started to present evidence that the media narrative around Tesla is a manufactured crisis of confidence.

Reinventing brands through electricity

Hyundai, South Korea’s largest car brand, intends to become one of the leaders in the high-stakes race: it announced that it plans to invest 41 trillion won ($35 billion) into “future mobility technology” by 2025. Some publications saw that as a decisive move which puts it on the map with some of its top rivals – for example, Volkswagen is spending €30 billion ($34 billion) over the next five years on electric innovation.

Hyundai also started a campaign intended to shift the dial on its perception as a “value for money” brand towards a brand with an emotional appeal, as vice-president of marketing and product Andreas-Christoph Hofmann aims to change consumer perceptions in Europe.

The company’s main problem as it further develops in the EV market has been its awareness in Europe. “We were low in Europe, 20%, in comparison to some competitors,” Hofmann told The Drum. “When we asked at this time the audience what they thought about the brand the feedback was about the rational aspects, value for money and quality, but not so much about the emotional aspects.”

The company’s strategy evolved from product-driven marketing to brand-driven communications revolving around its progressiveness and its history:

Meanwhile, Japanese brand Toyota is planning a massive deployment of battery-electric and hydrogen-powered vehicles for the Olympics and Paralympics, which will be held in Tokyo next year. The vehicles will include cars, buses, shuttles, scooters and mopeds, 90% of which will be either battery-electric, hydrogen or hybrids. In this way, Toyota will use the Olympics to promote its electric prowess.

Volkswagen Group, the parent company of Volkswagen, Audi and Porsche, has been viewed as one of the most aggressive automakers in the EV market. In fact, it’s on its way to repositioning itself as major player in the electric game in the wake of its major environmental scandal: a few years ago, the manufacturer made headlines when the Environmental Protection Agency (EPA) found that many VW cars had a software that could detect when they were being tested, changing the performance in order to cheat emission tests.

The scandal resulted in a steep reputation decline: Volkswagen‘s reputation in the Reputation Institute’s rankings fell from an almost excellent score to just a point away from the weak range. The public’s perception of the company’s corporate responsibility suffered the hardest blow, as consumers perceived it as unethical.

In a bid to recover its reputation, Volkswagen launched its Rebirth campaign, which aims to convey a mea culpa message and the company’s determination to reinvent itself by communicating its commitment to transparency, innovation and social responsibility. For the manufacturer, investing in EVs is a way to gain back its consumers’ trust.

The company’s crisis communications seem to have been successful, according to the Reputation Institute: as of this year, the perceptions of Volkswagen as an ethical company and a good corporate citizen are recovering, compared to the initial post-crisis decline.

BMW, a newcomer to the top 10 most reputable companies in the Global RepTrak® 10, has also been keen to communicate its focus to emissions reduction, producing more electric vehicles than any manufacturer in Europe. Like Toyota, BMW‘s strategy has been to reshape the traditional internal combustion engine as a cornerstone of its brand. It also runs the BMW Foundation, whose mission is to inspire and connect leaders while investing in impactful organisations.

Meanwhile, Mercedes-Benz recently overtook Toyota as the world’s most valuable auto brand in the latest Brand Finance Auto 100 ranking. Mercedes-Benz’ brand strategy is focused on reinventing the automobile, as David Haigh, CEO of Brand Finance, put it: “Their success has been driven by the introduction of a new generation of vehicles led by their renewed foray into SUVs and smooth evolution of new technologies to move away from traditional internal combustion engines.”

Electric voices

Also unsurprisingly, the most often quoted spokesperson in our sample of the media conversation was Tesla CEO Elon Musk:

Musk, who is certainly among the CEOs with celebrity status, has earned himself a notorious reputation on Twitter. In fact, Tesla’s primary platform of news and promotion has been his Twitter account, and no other car brand has had that degree of reach. Although he doesn’t follow any conventional social media strategy, a seemingly random tweet (Musk himself said that his tweets are often “complete nonsense”), sometimes generates tonnes of media coverage.

One of Musk’s most widely covered tweets was the one in which he pretended to consider taking Tesla private at $420 per share. The tweet later cost him and Tesla $20 million in fines, when the Securities and Exchange Commission sued him. As Vox’s Emily Stewart explained, “it wasn’t clear how much groundwork had actually been laid for such a manoeuvre, and it’s illegal for companies and executives to give shareholders misleading information about potentially meaningful corporate events.”

But Musk said that the tweet was actually “worth it.” Although it’s a bit unclear why, there have been estimations that his followers were up almost 5% at the time of the “$420” accident, which is close to the average month-to-month growth of the top brands on Twitter that usually rely on elaborated social media strategies.

Recently, Musk supported Volkswagen chairman Herbert Diess by tweeting: “Herbert Diess is doing more than any big carmaker to go electric. The good of the world should come first. For what it’s worth, he has my support.” The tweet reignited old media rumours about an eventual VW-Tesla merger, which VW had denied.

Toyota Executive Vice President Shigeki Terashi said that his company is now faced with a higher-than-expected demand for cars that use batteries but warned that profits will be slower. In the meantime, General Motors CEO Mary Barra said that his company’s future is all-electric: “Once you start to believe in the science of global warming and look at the regulatory environment around the world, it becomes pretty clear that to win the future, you’ve got to win” electric and driverless personal transportation, she told Bloomberg Businessweek. She also promised the automaker would launch 20 models of electric cars by 2023.

Sohinder Gill, CEO of Hero Electric, an offshoot of India’s largest scooter and motorcycle manufacturer Hero Motocorp, commented on India’s new reforms that were meant to boost the EV market and said that EVs have fared worse since they came into force. Tarun Mehta, CEO of electric scooter start-up Ather Energy, was quoted on the same issue, saying he had to stop sales in April and May to refit almost 1,000 bikes.

Electric future

The rush for an industry transition comes at a time of slow sales, an ongoing US-China trade war, Brexit, and, most importantly, new European emissions regulations, which will come into force next year and will compel car firms to minimise the emissions of carbon dioxide. As a whole, the industry braces itself for tighter standards for petrol and diesel vehicles as policy makers become more anxious to take action on environmental issues.

This March, the Geneva Motor Show, which focuses heavily on innovation and is regarded as a level playing field for the global car brands, had 151 world and European debuts, nearly half of which were electric or hybrid vehicles. Indeed, electrification was the main theme in the conversation around the show, with manufacturers and industry analysists being in a general consensus that electric mobility is the future.

Most car manufacturers think that the next 10 years will bring more change than the two previous decades and that by 2025, the automotive industry will be dramatically different. This growth is driven by the increasing market attractiveness of EVs, which is influenced by both market-specific (typically governmental regulations and subsidies) and non-market-specific (e.g. battery range) factors, according to Accenture’s Electric Vehicle Market Attractiveness study.

The degree to which the purchase of an EV instead of a conventional car is perceived as a more attractive option is also influenced by specific communication initiatives. Such efforts come mainly from government bodies – for instance, UK’s Department for Transport launched a strategy called ‘The Road to Zero’ in a bid to change the culture of car ownership towards electric cars.

The Department’s ongoing Go Ultra Low marketing campaign is supported by Audi, Citroen, Hyundai, Kia, Mercedes-Benz, Nissan, Peugeot, Renault, Tesla, Toyota and Volkswagen, strives to raise awareness about the benefits of electric cars and dispel some misunderstandings, since 89% of British drivers don’t know that electric cars accelerate quicker and 42% aren’t sure if electric cars could go through a car wash. Similar communication initiatives, which aim to adapt consumer attitudes to upcoming regulatory changes, intensify the media discussion around EVs.

For more on this topic, read our analysis “Geneva Motor Show 2019: Go Electric or Go Home”.

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