No room for advertising in Ford’s EV future

Ford CEO James Farley is “not convinced we need public advertising” as the automaker transitions from the internal combustion engine to a future based around electric vehicles.

Context 

Tesla spent almost nothing on traditional advertising last year but is the leading EV brand in the US. Ford, meanwhile, spent over $3 billion globally on advertising in 2021.

But, Farley told the recent Alliance Bernstein Annual Strategic Decisions Conference, it hadn’t needed any advertising for its Lightning and E-Transit electric commercial vehicles, while it had stopped ads for its Mustang Mach-E electric car “because we've been sold out for two years”.

A new marketing approach

“Our model's messed up,” he said. “We spend $600 or $700 on a vehicle to promote it, and we spend nothing post-warranty on the customer experience.” He wants to invert that approach. 

The traditional business model has included a profitable parts business, based on between 10% and 20% of customers coming back to the brand. “It'd be much better if we tried to develop an ecosystem where 100% came back, and we gave them experiences, and that's our marketing,” he explained. “You buy a Ford Model E and after a year we’re going to give you a complete detail of the vehicle, check all your software's up to date – you get a complete birthday for your vehicle.”

Key quote 

“If you ever see The Ford Motor Company doing a Super Bowl ad on our electric vehicle, sell the stock” – James Farley, CEO, The Ford Motor Company. 

Sourced from Alliance Bernstein