Wouter Witvoet—CEO and founder of EV technology group.
In a space as fiercely competitive as the auto industry, maintaining an edge is the top priority for all players. Especially as the race for electric vehicles fuels competition between seasoned automakers and emerging brands, it has created the pressure to stay innovative and find solutions that suit different driving habits and lifestyles.
But what really gives one brand a competitive advantage over another? Some would argue that it lies in the technology.
Technology has always played an important role in the industry. In the consumer car revolution of the early 20th century, Ford distinguished itself by: progress in production process: building the first cars in a streamlined mass production facility. In the 1960s, the British Motor Company introduced the Mini, which redefined the way passenger cars would be built and featured a transverse engine design that would become the standard for future front-wheel drive vehicles. Fast forward to the 2000s, and Tesla’s powerful battery technology has made the company a leader in the EV race by demonstrating the possibilities of long-distance and everyday EV use.
Each of these companies has used technology to help them lead the pack. But at some point, the same technologies that once set them apart are being replicated, reproduced, and improved across the industry at an accelerated pace.
If technology commoditizes, then what?
When technology commoditizes, as it does so quickly in the auto industry, its use no longer gives automakers an edge, but rather aligns them with the baseline level of expected activity. For example, what were once new and exciting features like a rear view camera and parking assist have become standard features that consumers have come to expect.
With comparable offerings from all the major brands, success doesn’t depend on whether a car has that extra bit of horsepower or a slightly bigger battery storage; it comes down to a brand’s ability to connect with a very specific customer need or desire and sometimes an emotion.
Think of some of the best car brands in the world. Each has a powerful bond with its consumers and is known to deliver a specific value. Ferrari, for example, is a sign of success, passion and history, while a brand like Toyota stands for durability and longevity. For car enthusiasts, who may have grown up with posters of these cars on their bedroom walls, there is a promise of character and style, no matter the model, advancement or decade. One of the most ambitious dreams for many people is to buy a Ferrari when they ‘make it big’.
Building that affinity with the consumer takes time and a significant investment. With average ad spend for EV brands starting at $33 million, investing in a new brand requires significant upfront expenditure with no guarantee of success.
Prolific classic car brands established these characteristics and connections for themselves long ago. The foundation for being seen as a symbol of status or exclusivity has already been laid. Take Moke, for example, a company I work with. Popularized by the glamorous French actress Brigitte Bardot in the 1960s and later a choice of the peerless spy 007 in four James Bond films, Moke brings to the electric world the potential to leverage its existing brand equity and consumer connection to it: fanatics who EV might not have been considered a new option.
While this tactic has recently played out elsewhere in the EV world, Volkswagen announced it would bring back the defunct Scout off-road brand as an electric SUV. But this tactic of finding dormant brands is perhaps best known for its impact in the world of luxury fashion. Louis Vuitton was known to take over dormant brands that he “sleeping beauties” (paywall) and support them through a transformation to create a successful revival – one of the most notable examples is Dior. Taking brands to a new world, be it fashion or EVs, involves existing brand equity and consumer engagement. For the auto industry, it offers car enthusiasts who might not have thought of an EV as a new, intriguing option.
Lean on existing Grand Equity
For many of the emerging startups in the EV space, strategies focus on building brand new mass-market-scale brands from the ground up. While this strategy may work for a select few, the saturation of the market and the strong brand equity that their competitors have already built with consumers means these startups are playing an expensive catch-up game. While many startups promise far-reaching plans, revenue forecasts, and solid-state technologies, recognize that it takes time to build affinity with consumers and consider existing brand equity of beloved and dormant companies.
As automotive technologies become more commonplace, as in other industries, I think consumers will continue to rely on the brands they know and love. For companies engaged in this visceral driving pleasure, there is also a broader social impact. When the brand’s car enthusiasts learn to trust and enjoy electric vehicles, they have the potential to accelerate adoption by enticing those who might turn a blind eye. As a result, I believe that what will ultimately make or break the driving experience in the EV world is brands with real customer connections that can now bring people into the EV revolution.