Electric Vehicles: Plugging Into a $1.6 Trillion Market
Welcome to part 1 of this month’s edition of our Brand Breakdown series, a monthly deep dive into the trending marketing initiatives of one company through the lens of owned asset optimization (OAO), a new approach to building consumer connection.
$1.58 Trillion
The global value of the electric vehicle (EV) market is projected to reach $1.58 trillion by 2030 with EVs accounting for more than two-thirds of global car sales by the end of the decade.
Although Tesla has a huge head start, traditional automakers are coming off the sidelines with plans to introduce 75 new EV models by 2030. Consumer adoption will accelerate as prices drop, battery technology improves, and charging infrastructure becomes ubiquitous.
In other words, electric vehicles aren’t a passing trend.
Yet, despite these positive signals, there are plenty of articles about sliding consumer demand, EVs sitting on lots, and production pauses.
So, is the EV market’s battery drained or fully charged?
If auto brands want a slice of that $1.5 trillion pie, they’ll need to understand what’s driving consumer behavior so they can build loyal relationships in the years to come. With an average brand loyalty rate of 50.6% in the auto industry, brands that authentically help consumers transition now will be positioned to win in the long term.
In this 3-part edition of Brand Breakdowns, We’ll plug into consumer search data to reveal what’s driving EV demand, which topics and brands are top of mind for consumers, and which car manufacturer may have the best shot to pass Tesla!
Related Reading: Brand Breakdown: The Case of Kia
High gas prices drive consumer interest in EVs
Consumer search data from Google Trends reveals the biggest drivers for electric vehicle searches are tied to our wallets.
The price at the pump is the single biggest motivator for electric vehicle searches. Each time gas prices spiked above $3 per gallon, consumers searched Google for electric vehicles. EV search popularity exploded in February 2022 when gasoline set a new record high of $4.22 before peaking at $4.92 per gallon in June 2022.
Although gasoline prices have decreased, EV search interest still remains high, supported by tax credits that make buying or leasing an EV more affordable.
Since saving money motivates consumers to consider EVs, analysts predict massive consumer adoption as electric vehicles become cheaper than combustion vehicles by 2026.
Tesla is still king, but it’s losing market share
Tesla has been the EV category king for more than a decade, and in 2023 the Model Y was the best selling vehicle in the world. Looking at consumer search data, the top five most searched for electric vehicle models are all made by Tesla.
However, despite Tesla’s commanding lead, traditional auto manufacturers are chipping away at its share of the total addressable market (TAM). According to Kelley Blue Book, Tesla’s market share declined by 28.6% between 2021 and 2023 as new buyers and competitors entered the market. Furthermore, Bank of America estimates that Tesla’s share of the EV market will plummet to 18% by 2026.
While sales are important to understand current market share, they don’t predict the future —?especially with so many new models on the horizon. To understand where the market is headed, brands can analyze consumer search interest. If we analyze search data by manufacturer instead of by car model, Tesla’s lead begins to shrink.
The chart above reveals that, among traditional automakers, GM has the most search interest for its current and upcoming electric vehicle pipeline. Although Rivian has twice the search interest as GM, the EV brand could be facing significant headwinds in the next two years due to new competition in the electric truck segment.
Consumer search data is the world’s most honest focus group
When consumers search on Google, they have an immediate need — a burning question that’s driving their behavior. If marketers tap into that curiosity, we can understand what consumers need, want, and feel, which could indicate how they’ll spend in the future.
Search interest (how often something is searched on Google and whether the trend is increasing) is one potential indicator of future sales performance. For example, if lots of folks are searching for Cybertruck and the trend is increasing, it’s likely the vehicle will sell well when it’s released.
Let’s look at the most anticipated new EV models arriving between 2024 and 2026, ranked by search popularity. (We included the Chevy Bolt here because the current model was discontinued and will be relaunched as a new vehicle in the next few years).
Half of the most anticipated EV models are trucks, which is bad news for Rivian because it means more competition. But this chart is great news for GM which makes five out of the top ten most anticipated new models.
The data gets really interesting when we group the above models by manufacturer. GM jumps into second place, and Tesla’s advantage in terms of consumer search interest in new models shrinks even further.
How can General Motors capitalize on the opportunity to close the gap with Tesla? What topics are EV shoppers most interested in?
Stay tuned for those answers and more in part two of our series.
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