Electric cars: What's happened to the ads?

Something has gone missing in the UK's drive towards zero-carbon motoring: advertising.

The DNA of the UK’s car fleet is changing. Whereas every car once had a tailpipe, that is no longer the case. Total UK car sales have declined recently, and a more detailed look at the figures reveals some interesting trends:

On the above graph electric vehicles (which includes all hybrids) are represented by the yellow curve, while petrol and diesel sales are represented by the red and blue curves respectively. You can clearly see just how dramatic the recent plunge in new diesel sales has been. And it’s equally clear that electrified vehicle (EV) sales are beginning to increase quite dramatically, albeit from a low base.

This rise in EV sales is impressive on a number of levels. Clearly there is a pre-existing level of demand for electrified vehicles; it turns out that some people want environmentally friendly cars that have dirt-cheap running costs and are often quite cool to boot.

However, demand can be induced – in particular, by companies' marketing efforts. Spend more on advertising a particular product or set of products, and more will be demanded; this is after all what advertising is for.

This leads to interesting questions: are car manufacturers themselves trying to increase demand - and if they're not, why not?

Heading downhill

Judging by advertising spend, the unequivocal answer right now must be 'no'.

Using figures shared with ECIU by the European think-tank Transport and Environment (T&E), we can reveal that advertising spend in the UK on electric vehicles actually fell last year compared to the year before - both in absolute terms, and in the percentage of the overall advertising spend:

Money spent on advertising different types of vehicle

Transport and Environment June 2018, ECIU percentage calculations

Put more bluntly, manufacturers spent 32% less in 2017 on advertising electric vehicles than they did in 2016. For comparison, they reduced spending on advertising combustion vehicles by 10%.

T&E found that across the EU's five biggest car markets (including the UK), hybrid and electric cars made up just 3% of the industry's advertising spend. And this despite the fact that there is clearly a market out there, with 30% of the public expressing their willingness to buy an EV. Even in Norway, where 40% of new car sales are electric, car companies spent just 10% of their advertising budget on non-fossils.

T&E's conclusion: companies' advertising spend follows demand rather than maximising a new market opportunity, even when that would be in their own long-term interest (as well as society's).

I say 'would be in their long-term interest' because it is clear, as I have highlighted before, that a whole host of new car manufacturers are coming. Even if established manufacturers are sanguine about competition from the Googles or Dysons of this world - and arguably they should not be - then Chinese companies' plans to dominate the global EV market should logically have them doing every single thing they can to accelerate their own transitions so they have any hope of competing.

Heading into reverse?

There is, of course, no law that says car manufacturers have to spend anything at all on advertising either combustion or electric vehicles in the UK. But why would they not promote EVs? They are, after all, the future (even ministers think so, having recently announced that all of the Government's car fleet will meet ‘ultra-low’ emission standards in just 12 years' time).

One reason why spending may have dropped is that they don’t need to spend more. Currently, uninduced demand (ie, demand with advertising stripped out) is outstripping the maximum supply that manufacturers can currently provide.