Marketing Electric Cars to Green Buyers

Tesla has had considerable success targeting green car buyers as it markets its initial two models of luxury all-electric cars, priced about $70k and up.

Now its biggest challenge is to meet the expected tsunami of demand for the popularly-priced all-electric Tesla 3. Starting at about $35,000, this stylish sedan is priced at half of what the other Teslas cost, yet it also carries the cachet of the Tesla brand, no small consideration. So Tesla has been active in the bond market to raise funds for the steep production increase needed to keep up with Tesla 3 demand.

Meanwhile, Tesla is booking way more than 1,000 reservations for the Tesla 3 every day. Delivery won't be for at least a year. This gives competitors like the Nissan Leaf time to appeal to buyers who want to drive green cars. Nissan is leaking bits and pieces of its new 2018 Leaf design to build anticipation and interest.

California is doing its part to encourage green buyers--it's looking at big rebates for all-electic and plug-in hybrids. This would bring the price of electric vehicles down to a level where mainstream buyers would do the math and see the financial benefit as well as the environmental benefit. 

US Auto Market Share Brawl

If Toyota is correct and the US auto market has peaked, meaning that total sales by all industry participants combined will barely budge in 2017, then market share is the name of the game. The only way for one company or brand to show growth is by taking share away from a different company or brand (including cannibalizing a brand in the parent's portfolio).

This situation will have a major influence on automaker's US marketing plans for the coming 18-24 months. So far, the signs point to a plateau.

For starters, consumers will likely benefit from increased financial incentives (rebates, for instance) as dealers and brands court switchers or try to hold onto usually brand-loyal customers. Dealers are also benefiting from manufacturers' financial incentives, which they may or may not pass along to consumers in the form of reduced effective pricing.

A table on the Wall Street Journal site shows that sales of light trucks are picking up speed vs sales of passenger cars. Gas prices are low, so even though SUVs and pickups don't deliver fuel efficiency equivalent to cars, buyers are returning to their truck-buying habits.

As a result, the market share brawl is not just a matter of, say, GM vs Toyota, but also cars vs SUVs and pickups, plus gas vs hybrids vs electric. How to stand out? For example, for differentiation and to appeal to targeted segments, Volvo is going all electric by 2019. What complicates this brawl is the aggressive entry of Tesla and its popularly-priced electric car (image at top). The market share brawl is underway!

Tesla, the Marketing Phenomenon

When Tesla's CEO announced the all-new, all-electric Model 3 at the end of March, car buyers didn't just cheer--they threw money at the company. Within three days, Tesla had received 276,000 pre-orders, accompanied by $1,000 per order.

And within days, the company was talking about whether it would deliver on time. After all, it usually delivers fewer than 52,000 vehicles per year, but its stated goal is to deliver 500,000 per year by 2020. Tesla's new battery factory won't be completed until next year, another factor that will affect the ability to deliver Model 3s on time.

Tesla made its name with high-end, all-electric cars that look classy, cost dearly, and perform like, well, high-performance vehicles. The Model 3 is different from the Model X and Model S because it's popularly priced at about $35,000, before government tax credits for energy efficiency. The price has captured many a headline.

Tesla's goal is to popularize eco-friendly cars. Specifically, it wants "to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible." The firm has even offered to open its patents to competitors to speed the process. It is building supercharging stations nationwide and around the world to make recharging faster and more convenient for drivers, and increasing the range of its cars to sidestep the fear of not being able to reach destinations before the charge runs out.

Often Tesla is called the Apple of the automotive industry, because of its obsession with tech innovation and design. Yet Apple may wind up competing with Tesla at some point. GM's Chevy Bolt will be a direct competitor when introduced next year. Stay tuned for a fascinating marketing phenomenon.

Marketing Electric Cars: All Charged Up

According to a Consumer Electronics Association survey, 40% of US adults want to test-drive an electric car. No wonder Nissan has set the marketing objective of delivering 50,000 test-drives for its new electric Leaf (above) over the next year.

Competition in electric cars is all charged up, with various marketing partnerships laying the foundation for future sales. The state of Oregon, for example, has teamed up with Nissan and Portland General Electric to promote electric cars for green reasons.

The Chevy Volt has been in the news lately, with much speculation about how its $41,000 price tag will be received by the target market. Demand might initially outstrip supply, and one report says dealers appear to be getting a premium for their Volts.

The most upscale and elegant of the electric cars are made by Tesla, which has attracted investment from both Daimler and Toyota. Enthusiasts can join the conversation on the brand's forum or on the Tesla Twitter community.