EV Marketing Failure in USA — and a Honda & Auto Industry Financial Crisis

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I just saw the following headline from the Wall Street Journal: “Honda’s Never Faced a Crisis Like This—and a Comeback Won’t Be Easy.” The subheading is as follows: “The Japanese automaker reported a $2.7 billion loss amid EV whiplash in the U.S., its biggest market.”

My first thought was basically wondering how much Honda was really focused on and pursuing EV sales. But, apparently, the company had finally turned a corner and was counting on EV development and growth being part of its future. Until the US market was hit by big changes in policy and sales went in the wrong direction.

But I really got stuck on this idea, which I’ve passed over a bit in the past — have Honda and other automakers expected a lot more EV sales to materialize than they’ve achieved? Have they expected buyers to pour in for their one EV model like people lined up down streets did to reserve the Tesla Model 3 back in 2016?

There’s suspicion of some funny business and PR behind these huge “EV” write-offs, with automakers also using this as an excuse for challenges they’ve faced from tariffs and overall auto demand. But they have clearly been losing money on their EV initiatives.

And that got me thinking about EV marketing in the USA. I actually see a lot of ads for electric vehicles. Many or perhaps even most of the car ads I see are for EVs, and not just on the internet where they are tracking my activity. I see ads for all kinds of electric vehicles on TV. However, they all seem to follow a similar formula — run a normal car ad, and maybe show the car plugged in for a second or two. I don’t recall ever seeing an auto ad highlight in an eye-opening or funny way how convenient home charging is, or how nice it is to never have to visit a gas station. I never see an ad highlight the unusual, fun, and useful benefit of instant torque. I don’t see them showing how much more relaxing and enjoyable one-pedal driving is. I don’t even see them making a point of the HUGE potential fuel savings!

To put it simply, they don’t market EVs like they are really something special and different from normal gas-powered vehicles.

So, when people get to the process of shopping for an EV, do they have the thought in their mind that EVs are something special and they should look into getting an EV? When they go to a dealer and are looking at options, do they know about the advantages of driving and owning an electric car? Do dealership salespeople then fill the gap and tell them about the convenience of home charging, or the huge fuel savings? I’m yet to see one of them do that!

Now, also consider what it takes to get someone to try a new technology. A slim portion of the population wants to jump in and try new technology by default. The new technology has to really offer something new and special that they understand they would enjoy or benefit from (as noted above, automakers and auto dealers are not communicating this to people), or it has to offer essentially the same experience at much lower cost (even the ways where you can save money over the long term — lower fuel costs and less maintenance — are not highlighted).

So, when buyers don’t pour in to buy these legacy automakers’ electric vehicles, who is actually shocked?

We’ve said for years that this poor, lukewarm marketing is because legacy automakers don’t actually want to sell EVs. But what about when these automakers are truly losing a lot of money and writing off billions of dollars of investment because not enough people want to buy their EVs? Did they really try to get themselves into this situation?

Yes, dramatic policy changes hit hard and account for a large part of the blame, but the ineffective marketing of electric car benefits are part of it as well.

“Honda Motor managed to stay profitable through a global financial meltdown, natural disasters, a safety crisis and the pandemic. Then came America’s electric-vehicle whiplash,” that Wall Street Journal article writes.

“The Japanese company, the fifth-largest automaker in the U.S. by sales, is confronting some of the steepest challenges it has faced in its nearly seven decades as a public company. U.S. tariffs have squeezed profits in its biggest market. Chinese upstarts provide a new threat. Above all, its electric vehicle ambitions in North America have collapsed.”

Honda, in particular, was criticized for years for not using its reputation as a company selling energy efficient vehicles to lead the EV market when it was getting going. The company has been one of the biggest laggards when it comes to bringing EVs to market and in public discussions about EVs. The fact that it was finally starting to try … just as the US market was slamming into a wall … is ironic. But after years of downplaying and criticizing EVs, Honda also contributed to its challenges.

And perhaps its US-centric approach has been a notable factor in all of this. The US is a huge market for Honda, while China and Europe are not. The US has not been an EV leader for more than a decade. But as we’ve been covering for years, the global trends are heavily towards EVs. China, Europe, and now “rest-of-the-world” markets are reaching quite high levels of EV adoption and rapid acceleration. The companies taking advantage of the shift and leading the technological investment and innovation — basically, Chinese companies and Tesla — are benefiting. Instead of jumping on the transition to EVs early and strongly, Honda and other legacy automakers have been followers putting in half-efforts. So forget about taking advantage of the EV shift that really is happening in South America, in Asia, in Australia, and elsewhere.

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