Ford CEO Jim Farley has said he sees little reason for the automaker to bother using traditional advertising campaigns for electric vehicles. Considering how often I see the Ford logo grace whatever screen I happen to be peering into, this would seem to go against everything I’ve been conditioned to accept. However the company believes its EVs practically sell themselves already, with the executive noting that the Mach-E has been sold out for quite some time.
“I’m not convinced we need public advertising for [electric vehicles] if we do our job,” Farley said during Wednesday’s Bernstein Strategic Decisions Conference.
First reported by Bloomberg, Blue Oval has opted to copy Tesla’s playbook and forego traditional advertising. Farley himself noted that the EV brand saves itself a bundle by circumventing the dealership model (something a lot of legacy manufacturers are now trying in Europe). Ford figures it can help offset some of the $50 billion it plans on spending to develop EVs through 2026 by scaling back its marketing efforts.
The CEO also noted that he envisions the Detroit automaker tweaking its relationship with dealerships in the U.S. to focus on service after the sale. This likewise apes the Tesla model and is broadly in line with some of the sweeping changes the industry is now considering we outlined in a recent article. But the abridged version is that there will be consolidation/vertical integration — and plenty of it.
“Our dealers can do it, but the standards will be brutal,” Farley said. “Their business will change a lot and there will be a lot of winners and losers and, I believe, consolidation.”
From Bloomberg:
Ford is one of the nation’s biggest advertisers, spending $3.1 billion last year promoting its products. But Farley wants to emulate Tesla Inc., which controls the US market for EVs despite not buying traditional advertising. He said Ford hasn’t needed to advertise its new F-150 Lightning plug-in pickup and that it stopped promoting its electric Mustang Mach-E because “it’s sold out for two years.”
“We spend $500 to $600 per vehicle on public advertising. Get rid of all of it,” Farley said. “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock.”
There are a few ways of looking at this. You can either see Ford noticing that Tesla doesn’t have a marketing budget and manages to trade well due to its hype on social media and the press spending the last few years talking about nothing else, you can suppose it doesn’t make sense to spend money advertising vehicles that aren’t currently available, or you can view this as a retreat from the EV space.
I can’t quite put my finger on it but something tells me that many legacy automakers haven’t been as committed to EVs as originally claimed. The industry has been spending billions on “mobility projects” that have helped get EVs to market. But I would hazard a guess that a large portion of that money went toward building data centers, advancing vehicular connectivity, and purchasing ancillary tech firms manufacturers assumed would explode in value or head the next great breakthrough in self-driving cars. Autonomous vehicles have been promised to us since Firebird II was filmed cruising down a fly-by-wire highway in 1956. But any practical application has always been “a few years away.” Even today, the technology seems a little too finicky to be reliable and the legal implications are so vast that it would probably take lawyers years just to agree upon who is ultimately to blame when something does go wrong.
But this didn’t stop automakers from marketing these technologies before they existed. Nor has it prevented them to promote some of the advanced driving aid systems that emerged as a direct result of the research.
Electric cars have had a better track record overall and were even commonplace as urban runabouts in the early days of the automobile. They’re tangible and can be bought today from an array of brands. But they’ve also cost the industry a lot of money and will continue to because that’s the nature of development. Ford presumably understands this better than anyone and has elected to hedge its bets while it doesn’t yet have the manufacturing capability to flood the United States with EVs.
Viewed from this angle, a lofty advertising budget dedicated to all-electric vehicles seems like a bit of a boondoggle.
Despite EVs having made some serious headway in specific markets, often with the aid of government mandates, the United States is typically at the bottom of the list. Meanwhile, the world is beginning to confront a situation where sourcing the materials necessary for battery production is assumed to get substantially more difficult and expensive. I’m assuming Ford simply sees no upside to marketing EVs until it has another one on offer and simply wanted to make a big deal out of the issue to draw some Tesla-like media coverage for itself. Successfully, I might add.
[Image: Ford Motor Co.]
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Since Ford EV’s are supply constrained for the next 2 or 3 years, I suspect this is merely a cost-saving measure. Once the supply catches up to demand, they’ll go back to paid advertising.
Right. “Supply constrained” lol
I’ve been waiting for my Tesla Model Y since late January. It’s likely to be delivered in September.
I demanded my Tesla in January, and it hasn’t been supplied yet.
That’s supply constrained: -256 days of inventory on hand.
Smells to me more like a speech to investors than anything else. “These things are gonna fly off the shelves and we can cut the advertising budget, and be more profitable!”
Agreed. It doesn’t even take captain obvious to figure this out.
“the Mach-E has been sold out for quite some time.”
So on the Mach-E. Ford had sold about 10.5k through April. That’s good enough for an *extremely* distant podium spot behind Tesla but that still puts it behind sales of the normal Mustang and it is Ford’s worst selling CUV.
fordauthority.com/2022/05/ford-motor-
company-sales-numbers-figures-results-
april-2022-usa/
So what’s the issue here?
1. The vehicle is not wildly popular but is supply-constrained.
2. The vehicle is wildly popular but Ford can’t build them profitably
3. The car is wildly popular and is profitable but Ford can’t get Mach-E unique parts to build them.
3 would be the best scenario while 1 and 2 would be swan dives off a cliff. Especially when Tesla is selling 100k+ EVs each quarter.
I’m going to guess it’s a company-wide battery supply constraint together with a likely decision to prioritize early Lightning production. As far as I can tell battery supply is the entire EV game right now.
I can tell you that our local dealers are selling Mach Es as fast as they can get allocations and for way over sticker.
With fuel prices at a high level and likely continuing to increase throughout the year I expect consumer EV demand is much higher than supply right now. However even a giant legacy company like Ford is struggling to get things with a plug built. And for EVs it seems to be even beyond “regular” supply issues (compare the MachE production to the Maverick). I’m not sure how Rivian or Polestar are handling things. Or smaller companies like Mazda.
The big winner will probably be Tesla because the wait is a few months instead of 2 motherfecking years on a vehicle they can only make 2500 of each month.
“As far as I can tell battery supply is the entire EV game right now.”
My father in law worked at Westinghouse in the 60s. They worked on an electric car way back then.
The problem was and still is the batteries. They comprise far too much of a vehicle’s total cost and require materials that will be scarce in the necessary quantities.
There isn’t enough lithium on the planet to make enough sub $30k cars that people actually want to buy.
“There isn’t enough lithium on the planet to make enough sub $30k cars that people actually want to buy.”
No really true. There’s about 30 ounces of lithium carbonate in the average car battery and about 39 million metric tons of lithium reserve.
The problem is actually more with nickel and cobalt. Anyway, as I’ve said in the past, Lithium NCM batteries won’t be the mainstream EV battery. LFE won’t either. I’m still placing bets on sodium-ion. It’s cheaper and more durable that lithium-ion. It’s also past the lab experiment phase and CATL and another company are starting production. It needs gravimetric density improvements, but that’s already happening. Na-ion is the future for mainstream EVs. Forget lithium-ion.
From Chemical and Engineering News:
https://cen.acs.org/business/inorganic-chemicals/Sodium-comes-battery-world/100/i19#:~:text=Rechargeable%20sodium%2Dion%20batteries%20are,the%20anode%20to%20the%20cathode.
https://www.pv-magazine.com/2022/03/26/the-weekend-read-sodium-ion-batteries-go-mainstream/#:~:text=CATL%20released%20its%20first%20generation,electrode%20materials%20for%20many%20years.
https://www.catl.com/en/news/665.html
With all the supply issues it’s hard to tell what’s selling and what isn’t.
“ So what’s the issue here?”
People don’t want EVs. Especially fake Mustangs that are riddled with problems and aren’t very good.
People don’t want EVs so much that they’ll wait years to take delivery and pay large amounts over already high stickers.
Yes I’m sure they are
As usual, on this subject, you’re talking with a complete lack of knowledge. Contrary to your dreams, they’re not riddled with problems, and the owners I’ve talked to have no problems with the way they drive (source: the Richmond EV car group I hang around in).
As to ‘fake Mustang’, the last I looked Ford Motor Company owns the rights to the name and builds the car. If they call it a Mustang, it’s a Mustang. Annoyed pony car lovers opinions don’t count.
“they’re not riddled with problems,”
If you want to ignore the truth, that fine, nobody will stop you. But the fake, non-Mustang is riddled with issues. It’s garbage. All new Fords are riddled with problems, why would this one be different?
https://www.macheclub.com/forums/ford-mustang-mach-e-complaints-issues-problems.62/
Tesla doesn’t need ads because Elon Musk exists online, maintaining the Tesla aura all on his own. Ford has no similar ability.
he is a front man, the things happening will happen, with or without this stiff.
Car advertising, especially on television, is so dismal that Ford could discontinue it entirely and I wouldn’t notice the difference. When we bought our Focus in 2012, I never looked at a car ad. My sources of information were TTAC and other road tests.
Is it real or just a dig at GM who spent the last 2 Super Bowls advertising electric Hummers and Cadillacs that no one could buy?
Meanwhile Jimmy Fallon is rapping about the fake lightning. So which is it Ford?
Ford’s plan makes a lot of sense.
Are you serious or being sarcastic again?
– I’m completely serious.
So you’ve thought about this?
– Yes, some. Could think about it more. You want justification for my statement?
Yes, please, your highness.
– Point a) Ford’s advertising wasn’t that great to start with — not $600 per vehicle great. You want more?
We can wait. Talk soon. XOXO.
@ToolGuy – I don’t see a downside to this decision.
In North America Ford builds pickups, SUV’s and the Mustang.
Pickup buyers tend to be very loyal so why spend a billion to convince maybe 1% of buyers?
There may be more wiggle room on swaying CUV/SUV buyers but since Ford makes it’s money on pickups, why bother?
Mustang buyers are probably brand loyal like pickup buyers and with Mustang sales dropping as babyboomers age, again is it worth the money to advertise?
Where do EV buyers get their information. I’m assuming they tend to be more tech-savvy therefore will find information for free on the net.
True truck buyers tend to be more brand loyal but before the pandemic truck advertising emphasized the discounts and no interest loans so that was probably to pump up sales and clear excess inventory which is no longer an issue. Pop up ads on websites might be more effective advertising for EVs than TV, radio, and print ads.
It’s all a commie plot, I tell ya. There’s a combination of problems that’s allowing China to get back at the US for being unfriendly, mostly fortuitous circumstances but exploited just the same.
Having offshored so much manufacturing to China, allowing America to become a sevices economy where people sell thin air and McFood to each other, Chinese coolies make actual real stuff to fill up the product bunkers at WallyMart and Blammazon. And in the now less well-off areas in America where consumer goods factories used to stand, youth kills itself off with opioids because there’s no serious employment and no future to look forward to. No American dream for the hinterlands.
The US blamed China for Covid. China had decided on a zero Covid policy. Sales drops due to the pandemic in the West meant commodity low-tech chips went into cheapy electonics instead of cars. Car manufacturers couldn’t get enough chips when sales picked up and at the same time Renesas burnt down in Japan.
The zero Covid policy in China was imposed so that cities would shut down completely if a local uptick was noted. But Shanghai decided they knew better, and only shut down parts of the city when Covid took off, instead of the whole place. This was detailed several months ago in business news. So the effect has been to draw out the pandemic in extra time in Shanghai as the local leaders went around trying to douse local “fires”. Hoping for the best with selective precinct shutdowns did not and has not worked.
TTAC has another article on Tesla and VW locking up workers in Shanghai to avoid their going home to catch Covid and stop production when tey return and infect their co-workers. Eventually, Shanghai, being so mismanagedm cannot now even service container ships on time. Gridlock on exports needed overseas from plastic everything to Buick Envisions is the result. Real product shortages abound.
Russia had already gotten annoyed enough by NATO to invade Ukraine, and the brainless warhawk Dems who had provoked the Russkies by ignoring them, thought that now was also a great time as well to give China a damn good verbal spanking for having had the temerity to use US investment there to build up a modern industrial economy that infringed on US hegemony around the world. And left the US without consumer goods factories at home, which was their own damn greedy fault. The US is the proverbial leader in insisting it have all the cake and eating it too, and everyone else had better back down if it gets upset with them. Well, the threats are becoming increasingly hollow.
So now the manufacturing and shipping debacle caused by inept Shanghai local authorities with Covid management has led to a big cooldown in supplies of cheapo plastic goods to the USA and the EU. Inflation is soaring, the stock market is down, car sales are down and all due to shortages.
Since China has not overtly supported Russia, it was not impressed by the US’s recent lectures citing various idiotic Beltway neocon beefs about China getting too big for its boots and “challenging” US supremacy in the world. Plus there’s the Taiwan issue. All of this led a week ago to the Deputy Chinese Foreign mimister to tell the US to tone it down, and he said it in no uncertain terms.
With all sorts of supplies from China either not being made or not being able to be shipped, which is causing all sorts of chaos in the West, you can be sure of one thing: China is in NO hurry to sort things out rapidly to please Brandon and his puppetmasters. If the US wants to lecture them about this and that, well they can damn well wait for the supply chains to ever so gradually come back to normal.
It’s the union go-slow and work-to-rule scenario writ large, and there’s not a damn thing the US and the West can do about it. The men with their oh-so true foresight who saw a way to get cheaper production from Chinese workers making two bucks a day twenty years ago and who abandoned their countrymen to make a bit more profit are now well and truly f**cked. And it’s mostly a combination of extraneous factors coming together rather than China planning all this as a deep commie plot. But now it is happening, well, the Chinese think, why not take advantage of it? Give the US a poke in the eye while having plausible deniability. Plus it all helps the Russians with whom China is planning a reserve currency based on a set of standard commodity prices, and to hell with the dollar. Been beaten over the head with that trick just one time too many,
The day of US primacy is coming rapidly to an end, and the only way to stop those damn Russkies and Chinese is by nuclear war. In conventional weapons including hypersonics and SARMAT and manpower and natural resources, the two countries have the US by the short and curlies. All of which is to say, if the crazies that run the US, the deep state, oligarchs, swamp creatures, bureaucrats, spy agencies and whatever get too annoyed by the effects of their past stupidities, it’ll be lights out everywhere in the not too distant future. If things don’t go nukular as that genius Dubya used to pronounce it, then in conventional terms, the US is destined to become a far less dominant country in the world, and they have only themselves to blame. Which is why all the saber-rattling as the super-ich see things likely to go on a bit of a downturn from the comfy way things are presently going for them. Unacceptable say these folk, oblivious to reality. Oh, and the EU is cooked and done no matter what, because without Russian energy they can’t even keep themselves warm next winter,
Interesting times.
Car companies are funding their own battery companies for EVs, and vertical integration of sub assemblies is comig back, instead of relying on that proverbial “outside” supplier. The US as a country should consider reverting to that model for its own sake to keep the country together — only thing Trump said that ever made sense to me, and even doddering Brandon seems to think the same way. That’ll take time, and it’s the intermediate time between now and then that will be dangerous to get through cleanly as commercial empires fail. Especially if the US continues to beat its chest proclaiming it’s number one, when it obviously isn’t anymore — looking at things rationally on that score is unfortunately not a US national strength in my opinion. They’d rather believe in myth.
@conundrum – well said.
Sheer greed. I will also add the dumbing down of Americans where they teach key boarding in schools instead of cursive writing. Many Americans have become fat and lazy and we have become a nation of consumers rather than producers. What use to be common sense is no longer so common.
Farley-
“Look at me! Look at me! I’m just like Elon!”
The first glimpse I had at the all-new for ‘04 F-150 was in a Tundra ad. Then in the Dodge and GM pickup carpet bombing of ads, all throwing dirt on plain fleet-white base F-150s vs of course their fully loaded pretty trucks.
I was fairly out of the loop, but figured if it had them craping their pantz, I better go take closer look. And I bought one. They were right to do so and it was the F-series’ biggest year to date, and for coming decades, but included the old jellybean for fleets only. I never saw one ad that year for any of them including Super Duty.
@DenverMike–In 2004, Ford introduced a new F150 body style. However, they still had 2003 models to be sold. So, they badged the older models as the 2004 F150 Heritage.
This can be confusing for owners of either model when shopping for parts and accessories. Most parts are NOT interchangeable between the 2 trucks. Fortunately, the cosmetic differences are significant. So, once you know what to look for, it’s easy to tell them apart. https://help.summitracing.com/app/answers/detail/a_id/4600/~/how-do-i-tell-if-my-2004-ford-f150-is-a-heritage-edition%3F
Thanks, the Heritage is the ’04 jellybean I mentioned. It still counts and fleets don’t mind the old, outgoing truck.
I did mind, and I was just there for the new one. The jellybean generation is the only F-series I haven’t owned between 1980 and aluminum, although it’s starting to grow on me.
Except I didn’t realize the Heritage was available in XLT and Super cab. As far as I know, there was no Heritage crew cabs nor Lariat, King Ranch or Harley trim.
The cheaper/fleet Heritage F-150s are easy to spot by the solid orange (corner) marker-turn signals, although the ’04 Lightning is a Heritage.
Ram was doing the same thing with the old Ram and the new Ram and Chevy did a similar thing in 2007. Good way for manufacturers to offer a more affordable truck while using stampings and toolings already paid for but presently just having enough chips and electronic components to make vehicles makes it more profitable to allocate those components to vehicles that are more profitable. I doubt the manufacturers will be funding any major redesigns of vehicles since in the last few years they have introduced redesigned trucks. Also manufacturers are spending on developing EVs that otherwise would go for new ICE. Will be interesting to see what the manufacturers will do over the next decade.