Saw an ad for an EV? Good luck buying it

If you tuned in to the Super Bowl this year, then you probably saw the ads that aired during the broadcast to show off electric vehicles like the Cadillac Lyriq SUV or the Ram 1500 REV pickup truck.

But if you didn’t happen to put a deposit on the REV right away, you may find yourself out of luck. After just five days, the automaker, which didn’t disclose how many slots were available, said reservations were sold out; the vehicle itself won’t be delivered until late 2024. As for the Lyriq, 2023 models sold out hours after going on sale last year, while 2024 models won’t go into production until later this month.

Despite the limited inventory, though, automakers are advertising electric vehicles at a frantic pace. In 2022, marketing for EVs and hybrid vehicles accounted for nearly a quarter of estimated national TV ad spend among automakers, according to estimates from iSpot.

“They’ve been advertising things that don’t necessarily exist yet, don’t exist at scale, or are very difficult to get,” Kevin Tynan, senior automotive analyst at Bloomberg Intelligence, explained. “They can talk about it. They can make Super Bowl commercials. But when it comes down to it, if you go to the showroom, you can’t buy it.”

Why the discrepancy? Experts said the message from automakers is more about brand building and building hype around electrification. After all, automakers are still relying on the continued profitable sales of gas-powered vehicles for the bulk of their revenues.

“It’s very important to advertise EVs because they are in many ways a halo for the brand, and they tell the story of the innovation of the brand,” Marty Shelata, the SVP of auto partnerships at the TV advertising company Ampersand, said. “But the fact is, it costs a lot to market vehicles where there isn’t much volume.”

Plugged in

EV sales are undeniably on the rise, but they’re still a small percentage of the total car market. Total new-vehicle sales were estimated to be 13.8 million in 2022, according to the auto research firm Edmunds, and EVs accounted for around 5% of new cars sold in the US.. This year, new-car sales are estimated to reach 14.8 million, according to Edmunds, while EV sales are expected to exceed 1 million vehicles in the US for the first time.

You wouldn’t necessarily get that impression from TV ads. Take the Super Bowl, for example: In 2022, the broadcast included ads for seven EVs. This year, it was down to just three EVs, but that’s still three times as much as the single Super Bowl ad for a traditional internal combustion vehicle, Kia’s Telluride X-Pro.

That’s because automakers know that brand-building ads are part of a long game, Shelata said.

“It’s not just about selling a vehicle tomorrow,” Shelata told us. That’s particularly true during economic downturns, when there’s “a need to maintain that brand perception through tough economic times so that you’re stronger coming out of it,” he said.

Plus, running flashy TV campaigns about EVs isn’t just about advertising to consumers. It may serve as a signal to investors who have rewarded EV-maker Tesla, which has been valued to be worth eight times more than automaker Ford despite selling far fewer vehicles in a given year.

“Other automakers are saying, we can market what we’re going to do five years from now or three years from now in hopes of getting a similar market capitalization consideration,” Tynan said.

Charging up

As automakers continue to invest in EV technology, it’ll be at least a few more years before many of them will be able tomake that portion of their business profitable—which may help explain why there aren’t more EVs available to buy, Tynan said.

“It has everything to do with profitability,” he said. “When it makes sense for me to do it, I’ll do it. But until then, I’m just gonna say the words and put out some commercials and sprinkle some EVs into the marketplace, but I’m gonna protect my income statement, and try not to lose too much money on this stuff.”

In the meantime, marketing EVs today to benefit from the brand-building it can deliver can also serve as a way to potentially future-proof the business for tomorrow, especially as the federal government pushes to make more charging stations accessible and expand consumer tax credits to more EV models.

“It’s creating pent-up demand for something so that when you do come to market with it, you have a better chance of consumers being willing to pay a price point that does get you profitable,” Tynan said.