Ferrari just held the Annual General Meeting of Shareholders, and the Exor CEO and current Ferrari CEO John Elkann gave some important statements. The most-reported these days has certainly been the one about the release of a full-electric model by 2025. The year promises to be full of surprises, as many of Ferrari’s direct competitors, Aston Martin, Bentley, and rumours say even Lamborghini, plan to release their own EV in 2025.

Most of the talks, however, have been focused on Ferrari “continuing to execute the electrification strategy in a disciplined way”. But in the modern automotive industry that has become almost a necessity. The most interesting partof the statement was arguably the following one:

“our interpretation and application of these technologies both in motorsport and in road cars is a huge opportunity to bring the uniqueness and passion of Ferrari to new generations”

It shows what is the rationale and the vision behind the first claim. The renewed strategy of the company that so far, in some ways, looked more detached from its younger audience of potential future clients. It shows Ferrari’s intention to be there to inspire EV enthusiasts, which are on average much younger like it has inspired generations before them with its ICE supercars and race cars.

*John Elkann, Exor CEO and Current Ferrari CEO

Bentley Motors announced a few days ago the development of its latest project. A 60-stories building co-developed with American developer Dezer to offer a Bentley branded residence experience featuring lots of amenities. Among these, probably the most striking is the so-called ‘Dezervator’, an elevator that will allow owners to bring up with them up to 4 vehicles and park them alongside their apartment.

*Source:Bentley Media - Bentley Branded Residence

This solution was already featured, a while back, in the Porsche Design Tower, developed once again by Dezer with the German automaker.

Bentley in fact is just the last one of a fast-growing list of luxury automakers and luxury brands approaching this market. Before the British marque, similar developments have been started, or are already in the pipeline for Aston Martin, Bugatti, Mercedes, Pininfarina, Porsche, and Tonino Lamborghini(at least in a way related to the automaker).

Branded Residences have been a growing trend in the luxury industry for a while now. It is gradually expanding to lower segments of the market too. But while the vast majority of these projects is still handled by Hoteliers (Marriott being the largest), automakers now constitute a consistent share of this niche.

But how does it work and why would a low-volume automaker develop and sell or rent a super-luxury residence?

A MARKET OVERVIEW

The competition in the top-end of the luxury market is becoming fiercer. Along with automotive manufacturers, also fashion brands are approaching it. So, for anyone interested you could also decide to buy, or book a long-stay in an Armani Residence in Dubai, or a Missoni one in Miami.

Clients in the niche are becoming more and more demanding. A high level of customer service is expected,so brands have to constantly come up with new, innovative, and unique solutions to lure the attention of their selected clientele.

*Source:Savills 

Required services might vary from more basic ones like mail and package delivery, restaurant, spa and salon reservations, golf courts, 24/7 security, various loyalty scheme, and Concierge services, to on-demand like housekeeping, laundry services, in-home dining service, personal shopping, personal trainer, spa treatments, childcare services, pet services, meeting room services/office equipment, use of the guest suite. From there, pretty much anything is possible and it represents an added value for the clients. Yacht Marinas, Art Galleries, Shops, Meditation rooms, Movie theatres.  Prices vary from $1 million up to around $50.

According to Savills three are the main locations in terms of Branded Residences available schemes. Miami, Dubai, and New York. Asian Cities are instead the fastest growing. On top Hangzhou, Guangzhou in China, and Seoul in South Korea with a projected growth of 189%, 180%, and 78% over the next 5 years respectively.

Additionally, while right now the Automotive marques share of this market is around 5%, this is set to grow up to 24% by 2025, second, as a non-hotel brand, to fashion ones at 28%.

AUTOMAKERS COMPETITION AND OBJECTIVES

On the one hand, this is an interesting diversification solution in a market that is steadily growing and is relatively new. On the other hand, some risks must be taken into account.

The branding of these buildings is usually licensed by the marques to the developers, and later the owners will also pay some fees on it. Other earnings can come from design work and technical consultancy. So, while this represents an additional stream of revenues, there might be risks connected with brand image. The reduced control over the property management might affect negatively the company’s name if the services or facilities are not considered up to standard.

If money is invested too in a different type of contract the risk might increase. This is in fact a very competitive niche and with a small customer base. Luckily, at this end of the market, with the asked price in the tens of millions, the possibilities are almost endless. So, luxury automakers and their partners have to rely on features and services that other brands outside the automotive niche cannot, or would not think about.

*Source:Aston Martin Residences - Aston Martin Residence Penthouse Floor plan

First of all, the design can be daring and become a stand-out characteristic when it is related to a supercar manufacturer more than a regular hotelier. As for special features, the car elevator paired with the sky garage is one. But probably the most emblematic is Aston Martin’s $50 million penthouse that includes in the deal a 1 of 24 track-only Vulcan plus track driving lessons and a membership to a private track club. This kind of deal along with the experience itself offers proper access to the brand’s life and promises a continued experience in time.

Some projects have a different drive. It is the case of Pininfarina. As discussed in the review of the automotive coachbuilding sector, throughout the years as the bespoke automotive production faltered, brands like Pininfarina have expanded becoming full-fledged design houses. In this case, the architectural design, as well as the sustainability principles applied are fully coherent with the brand’s portfolio and new image.

*Aston Martin Vulcan

CONCLUDING THOUGHTS

All in all, this market offers clients the opportunity of buying a property that includes every amenity and service imaginable, but at the same time also becomes part of a brand and its lifestyle. And this was probably the main driver for the entry of automotive and fashion (and other non-hotel) firms in this space.

This niche is new, so there might be doubts about its long-term resilience when it comes to properties that command such huge premiums, especially after this difficult year. Nonetheless, branded residences can become an important marketing tool for luxury automakers. They can help to further increase the marque’s exclusivity factor, promote their values, such as sustainability in the case of Bentley through design, materials, and innovation, and create a closer relationship with the clients inspiring brand loyalty.

The Porsche Taycan has been a big deal for the industry since its first appearance as a concept under the name Mission E. It was the first long-standing established luxury manufacturer to start the production of an electric vehicle, which is something that very few do even today.

During its first year, Taycan has been a commercial success too, selling 20,015 units. It prominently entered Porsche’s lineup, exceeding the Boxster/Cayman 19,263 sales of 2019, which was a year of general strong growth. Additionally, as of today, outside of China, EVs have been mainly sold in the premium segment of the market. Mostly due to battery pack costs and customer habits.

For a while now, China’s customers, in fact, have seemed to be less concerned with maximum range and tend to favour more affordable cars instead, to move mainly in the city as highlighted in the Chinese Market Research.

PRICE OF THE BEST-SELLING EV MODELS IN CHINA AND EU-US IN 2017

*Source: 搜狐 Sohu, 2017 年纯电动乘用车销量前十名车型品牌, European Alternative Fuels Observatory *prices in the brackets are after incentives

2020 MAIN PREMIUM EV MODEL SALES

*Tesla reports Model S and Model X sales figures together
**Audi data accounting only for the first 9 months of the year
***New Data for Mercedes EVs coming on February 18th

Along with the good results shown in this graph, there are two important factors to keep in mind. The first is that except in its base version, Taycan is generally much more expensive than the competitors listed here (the new Tesla Model S and X Plaid come closer to it). Secondly, Model X, Audi E-Tron, and I-Pace are all in the small SUV or Crossover segment which is definitely more sought after these days. These two factors make the Taycan results even more impressive and more interesting the potential for the upcoming Cross Turismo.

This scenario is likely to change significantly in 2021 as a number of high-profile competitors have entered the market in mid to late 2020. Polestar 2, BMW iX3, Ford Mustang Mach-E to name a few.

Determined the Taycan noteworthy success, even within a competitive segment that is not the most popular nowadays, let’s have a look at how Porsche achieved this success. What kind of campaigns did Porsche employ for its first EV Promotion?

MODERN ONLINE MARKETING

Taycan like many other luxury vehicles, especially during 2020 with lockdowns and restrictions got a lot of visibility thanks to online reviews and driving tests. Since its release, in fact, it made the first page of pretty much every automotive social media outlet, not only for the novelty of being an electric Porsche but thanks to its characteristics. From the overall build quality far superior to that of its competitors to its driving capabilities.

Chris Harris, like others, in his review points out how the car driving dynamic and agility is superior to other electric vehicles and actually extremely close to the one in a regular Porsche ICE Sportscar despite its considerable weight.

Additionally, a consequence of the interest in the new drivetrain and technology started by Tesla’s success is that Taycan too caught the attention of a new audience that does not necessarily overlap with that of car enthusiasts. EVs have in fact grown in popularity among the tech fans community. Satisfying the needs and wishes of this new (and generally very young) audience can benefit Porsche by bringing in new potential clients and increasing brand loyalty.

These are crucial components of modern marketing for any luxury car. In the case of the Taycan though, there is more…

SOME UNIQUE MARKETING

I previously discussed the success of The Heist, the second most-viewed automotive video on YouTube, and a great example of the power of storytelling in automotive marketing that many other automakers are following. This is already quite a unique achievement and a display opportunity for Porsche.

The second one-of-a-kind initiative to promote Taycan has been realised in Seoul on the occasion of its launch in Korea. The show itself featured an extraordinary light show symbolising the futuristic look and technology employed for this car. What is even more surprising though, is that in the days leading up to the event, a lorry carried around through the city an installation with a 3D Hologram representing running horses. The idea comes from the name of the car which according to Porsche ‘can be roughly translated to mean soul of a spirited young horse’.

*Source:Porsche

While very impressive, this is not the last unusual campaign organised by Porsche to push the EV to maximum visibility. So here comes the Guinness World Records.

On two separate occasions, Taycan achieved World Records for the longest drift with an electric vehicle and the highest indoor vehicle speed.

On the first, driving instructor Dennis Retera completed 210 laps of a 200 metres circle, for a total of 42,171 Kilometres covered in 55 minutes. This specific record served also to showcase the potential of the rear-wheel-drive Taycan, produced exactly to enhance the fun and feeling of a true sportscar.

*Source:Porsche

The second record instead was set by racing driver Leh Keen reaching a top speed of 165.1 Km/h in an enclosed building. This time the AWD Taycan was used to maximise grip, acceleration, and crucially, deceleration, as the space available was limited by the Guinness World Record rules.

This was an important showcase of top performance. Complete trust in the vehicle’s capabilities on a tricky slick surface, allowed the driver to achieve the record on the first attempt.

*Source:Porsche

CONCLUDING THOUGHTS

Even though from an everyday performance perspective these achievements might not seem to mean much, this is different for car enthusiasts and will likely prove to be a smart move. Proving that a good electric sportscar is more than just straight-line speed, might help to convince current luxury performance car buyers that generally meet EVs with a certain scepticism.

If all the rest was not enough, this will at least be another way to record the Taycan on the history pages.

In today’s luxury automotive sector Porsche is one of the most influential and successful brands on the market. This is due to its long history of excellence, its achievements in motorsport, and the overall status that the brand has reached.

But there is more to it. On the marketing side, in the last 30 years, the company and its decision-makers’ ability to anticipate and likely influence massively important trends are not only what saved it in the 90s, but what pushed it even further to become the powerhouse it is today.

TIKTOK AUDIENCE BY AGE GROUP IN THE US (2020)

*Source:Statista

This data, along with controversies and security concerns surrounding TikTok, despite indicating the presence of a sizable audience even in higher age brackets, is likely one of the factors that stopped many automakers in the luxury niche from entering the app.

These numbers did not go unnoticed anyway as Instagram, as it did before with Snapchat and the Stories, just rolled out a new feature. The Reels. These 15-30 second full-screen swipeable videos are pretty much an exact copy of what TikTok is all about. While this worked before, it still remains to be seen if Facebook through its “younger” Instagram will manage again to pull this off.

HOW IS THE COMPETITION ON SOCIAL MEDIA?

Below are the graphs that show the following and engagement for all the major companies in the luxury and luxury performance market niche.

INSTAGRAM

WECHAT

LINKEDIN

YOUTUBE

FACEBOOK

TWITTER

WEIBO

It must be noted that especially when it comes to engagement data, the results can be affected by the specific time of the year, such as this one which includes the holiday period.

Nonetheless, if compared with the graphs reported in my previous Social Media Analysis from March, some interesting insights emerge. First the growth difference between platforms. Facebook for example presents an average following growth of 1.4% in almost 1 year, while YouTube and Instagram have grown on average by 16.8% and 10.5% respectively. The growth on LinkedIn reaches a shocking 48.7% on average. Of course, the absolute numbers have to be taken into account. Numbers on LinkedIn for instance are massively inferior to those on Instagram, which makes a 10.5% audience increase even more impressive.

The balance in the competition remains mainly unchanged on platforms with “clear winners”, but overall, brands such as Aston Martin that so far had a smaller following are closing the gap.

So, what about Porsche?

Porsche maintains a consistent presence on all the major social media platforms, leading the way on several of them or being a close second. But let’s go a bit more into details.

As mentioned at the beginning of the article, Porsche looks to be always two steps ahead of the rest, setting trends instead of chasing them. One way to do that, in this case, is gaining exposure with the right demographic. A young one that will eventually grow up becoming a future potential customer base. As it happened with motorsport gaming before. Right now, the two platforms to achieve that are definitely Instagram and TikTok.

INSTAGRAM GLOBAL AUDIENCE BY AGE GROUP (2020)

*Source:Statista

Since March, in fact, Porsche’s largest following increase, except for LinkedIn where the company page has just exceeded half a million, is on Instagram. Its Instagram profile has grown by 15.5%, so way above the average, and topped only by Koenigsegg with +21.8% which anyway started too from a much lower basis.

Secondly, Porsche is the second company of the ones analysed here to join TikTok. With the other, arguably not casually, from the VW Group too. Lamborghini opened an official account on October 30th, 2020, and Porsche entering too on November 16th.

On most platforms, posting frequency does not have statistical significance in relation to engagement or following. For YouTube though, where Porsche does not have the biggest channel but has by far the highest number of videos, a linear regression shows a strong positive correlation between content published and engagement.

Finally, in terms of content, Porsche's recipe for success is a unique mix ofStorytelling, motorsport, ranging from GT Endurance Competitions to LMP Competitions, Clients’ Racing, automotive heritage, Formula E, and, of course, Electrification, whose popularity is growing massively today. This is properly developed tuning the message and the delivery according to each platforms’ characteristics.

*Source:Porsche

 

Additionally, a relevant factor is the positive coverage the brand receives from third parties and motor journalists. Started in 2013 with the 918 Spyder and continuing today with records and big achievements. Whether is some good review from Top Gear’s Chris Harris, the outstanding series of drag-race records on Carwow (one of the largest automotive-related channels on YouTube), or praise coming from other online personalities. It all contributes to strengthening the brand reputation as one of the top performers in the world and constantly at the top of the game.

Porsche enjoys the fruits of bold steps taken in these last 30 years and that continues to take today. And it does that while celebrating its long history, not only through its iconic design, that with 911 is arguably the most consistent in the industry, but also through a constant marketing work. It is evident also the focus on a younger audience and fast-growing platforms, which often coincide. This translates into Porsche’s constant presence on Instagram, LinkedIn, and YouTube, as well as the recent entry on TikTok.

This daring and forward-looking strategy gave it a competitive advantage that is well reflected in its social media presence, and that no one else can quite match. Taycan and its upcoming siblings are only the last ones on a long list, so far.

As this strange 2020 draws to a close, I thought it would be fun and fitting to review the best social media marketing campaigns and different approaches used by the luxury automakers over the Christmas period to either celebrate the holidays or give an outlook on their 2020.

1. THE CHRISTMAS GIFT – LAMBORGHINI

As usual, by now, Lamborghini publishes the most successful Christmas-themed video of all. It is called The Christmas Gift, quickly approaching 6 million views in around two weeks on YouTube and over 14 million on Instagram.

The ad perfectly captures the spirit of this year’s holidays spent, in the majority of cases, away from friends and loved ones. Even so, and almost without showing the car Lamborghini manages to convey the most important values of its brand. Passion and love for the thrill of driving.

Much like the two campaigns released in previous years, this one has been received enthusiastically.

The same video, in fact, is already the second most-watched on the recently created Lamborghini official Tik Tok Channel with over 3 million views. Lamborghini being the second company in the space after Mercedes Benz to enter the platform and shortly followed by Porsche, while all the others

2. BENTLEY TAKES ON A VERY SPECIAL COMMISSION – BENTLEY MOTORS

This is in my opinion the smartest and funnier Christmas ad published by a brand in the luxury performance niche this year.

Bentley receives a commission for its flagship Flying Spur by Santa Claus himself. The video featured in the latest article about Bentley Marketing Strategy involves not only Product and Design managers, and a Mulliner’s specialist (Bentley’s personalisation division), but also showcases some high-end bespoke features and craftsmanship capabilities. 

The ad got a good reception on other platforms as well. On Instagram instead, Bentley has started a series of holiday-related posts under different hashtags both through @bentleynewsroom and the official page @bentleymotors to promote winter initiatives like #BentleyFestiveTour, #12DaysofBentley, and the challenge #BentleyFestiveLights.

3. A MESSAGE FROM AN F1 TEAM TO THE OTHER - MCLAREN

McLaren’s initiative has also been received with praise on every online platform even though it was not through its automotive company channel but via the official McLaren one. The company from Woking used its most powerful channel right now, the Formula 1 team.

Building on the 2020 season’s success and the extreme popularity of its drivers among the sport’s enthusiasts, the Formula 1 team published a video sending Scuderia Ferrari the Christmas wishes along with a gift. Formula 1 driver Carlos Sainz, who will be joining the Scuderia next year after two successful years in McLaren.

This has been one of the most captivating social media initiatives not only in the automotive space but also in Formula 1 as a great example of the values that move and shape the sport. So despite not being dedicated to fans or enthusiasts but specifically to a Formula 1 team, I thought it definitely deserved to be mentioned here.

Another interesting campaign is the 25 Days of McLaren published on Instagram and Twitter under the hashtag #25DaysofMcLaren. A series of short videos published once per day and leading to the 25th of December inspired by the Christmas Carol 12 Days of Christmas. Each one is a throwback to an important moment of the company’s year, remembering achievements and important successes in this difficult year.

4. DRIVE DEFINES HER AND THE 12 DAYS - PORSCHE

Porsche has published the first episode of what will likely be a series celebrating gender diversity(and maybe more) not just among automotive professionals but also its customer base through different professional paths. Drive Defines Her.

This first video features Nayla Al Khaja. She is the first female director and producer in the UAE, who also manages a production company a film Club in Dubai. Al Khaja is also active on social media and events as an influencer.

This is a sensitive topic that will resonate differently from more conventional automotive ads with its audience. However, it is an important statement on this topic.

Finally, much like McLaren and Bentley Porsche too had its own 12 Days of Porsche published on Twitter. A video each day featuring real music and Porsche-related lyrics.

5. A LOOK BACK AT 2020 - FERRARI

On December 23rd Ferrari released a video revisiting the main events of its 2020. It is an interesting piece of content to appreciate the variety of activities within the Ferrari Business and Marketing Strategy as well as the help offered to the community during the pandemic. E-sports, GT competitions, new models, merchandising, museums, the respirator valves, Formula 1, and more.

AN HONORABLE MENTION - MERCEDES

This is not listed among the others because along with a few ‘more traditional’ posts on social media, the piece of content in question has not been published on the major platforms and is dedicated to a specific demographic. The people working in the media.

After this difficult year, Mercedes with this short and “light-hearted” video published on its website celebrates the effort of the professionals involved in the industry who kept working to bring news and information about their products during these times.

Definitely an interesting point of view that no one else expressed.

Which ad or campaign was the best this year? Share your thoughts and comments below or on social media!
In the meantime, I hope this was a light and fun read.
Best Wishes of a Happy New Year!

For the German automaker, electricity is the way, but not alone. In a recent press release, Porsche’s R&D Member of the Executive Board Michael Steiner claimed that while a large chunk of the companies’ investments is going in electrification and software development, they will not stop with the development of internal combustion engine (ICE) either. This is especially true for the 911, the brand’s top range production sports car, which as highlighted in a previous article Porsche EV Development Strategy, will not be replaced by a full-electric version (at least in the foreseeable future) as the focus on driving experience is its most important asset. Two major factors in favour are the combustion engine itself with the sound it produces, and the significant difference in weight due to the absence of battery packs necessary in EVs.

The additional research on ICE improvement though has to take into account the environmental regulations for sustainable mobility, and it is here that Synthetic Fuel comes into play. Porsche is looking for partners for this venture and it is specifically focusing on the so-called eFuels. Differently from regular gasoline, this is produced by a combination of CO2 captured from our atmosphere and Hydrogen. Granted that the latter is obtained through renewable energy sources, eFuel can be virtually carbon neutral. Since the announcement, Porsche has cooperated with Mahle on a series of tests of eFuel in a production car.   

So, according to Porsche, while electrification is a viable option, it will not be enough to significantly reduce Greenhouse Gas emissions (GHG) at the rate required. Additionally, while complete electrification would require the substitution of well over 1 billion cars on the road today, eFuel would allow to cleanly run ICE cars with almost no modifications.

The discussion around Synthetic Fuels has been around for years now, but the solution is not as simple as it seems.

HOW SYNTHETIC FUELS WORK

First of all, the development of Synthetic Fuels is still in its infancy. There are several options for converting renewable energy sources into fuels. However, none of these processes is yet optimally developed.

CO2 can be captured from stationary sources such as industrial plants’ wastes. As of now though, it requires high costs for storage, as it is pumped deep underground, and there are still concerns regarding potential leaks. In the US, Carbon Engineering is developing a system to directly capture carbon dioxide in the air, which would be an important solution to reduce the actual CO2 present in excess in the air while also utilising it. Bill Gates himself backed this company’s investment (CNBC).

*Carbon Engineering Fans Complex - Source:Science by Carbon Engineering

Through a large fans complex and chemicals dripping in the tower the CO2 is captured and then processed. This procedure is not only clean as all the chemicals involved are recycled, but also promises to lower the cost per Ton of CO2 to $94-232 from the current $600.

 

*Carbon Engineering CO2 capturing process

 

After carbon dioxide is captured, there are two main processes to derive Synthetic Fuels. One is direct through electrochemical synthesis or photocatalysis with direct CO2 catalytic reduction. The other is indirectly completed via the conversion of biomass.

The electrochemical reduction, the one approached by Porsche, is considered the most promising technology. It can reduce GHG emissions and has numerous potential applications, not just in the automotive sector. It is performed by using renewable energy (solar, wind, or other) to reduce CO2 into hydrocarbon fuels (CO) through electrochemical conversion technology. Similar to water electrolysis, the electrochemical synthesis uses energy to cause a chemical change, substituting potentially toxic reagents and allowing for cleaner reduction.

The other direct pathway is the Photocatalytic reduction of carbon dioxide through semiconductors and solar energy.

*a)Carbon Dioxide photocatalytic reduction b)Carbon Dioxide electrochemical reduction
Source:  Xia et al. 2020, 可再生合成燃料研究进展

As for biomass-based fuels production, according to Xia et al.(2020, Progress on renewable Synthetic Fuels), despite being useful and clean, it presents several problems. First is the lack of sufficient biomass to cover the mobility industry. Then, biomass realised from edible crops is not suitable for large-scale production, especially in developing countries. Finally, the one obtained from residues of agricultural and forestry crops requires a much more complex process that results in high costs but low efficiency.

WHO ELSE IS INVESTING?

Porsche is not the only one interested in the eFuel option. To stay within the same group, Audi, Bentley, and Volkswagen have their investment programs.

McLaren’s COO Mr. Ludmann also believes that Synthetic Fuels are a viable opportunity. Bosch which has a huge R&D division dedicated to the development of automotive components also showed a strong interest in the development of this resource.

It’s not just automotive companies as well. FuelsEurope, a group that counts 40 Companies operating refineries in Europe and accounting for almost 100% of the European oil refining and 75% of the refined fuel retail sales. In an increasing focus on sustainability, the documents Vision 2050 and Clean Fuels for All outline the future of the industry through eFuel and other Synthetic Fuels.

Last but not least, China’s Association for Science and Technology (中国科学技术协会) in mid-2019 published a list of twenty scientific and engineering key issues and necessary innovation including synthetic fuel obtained with regenerative resources as one of the most urgent. This decision is even more significant when taking into consideration the huge effort the Chinese Government has gone through so far to empower the national EV market. Check China automotive market: Real openness or concealed protectionism? to know more.

WHO IS AGAINST AND WHAT ARE THE ARGUMENTS?

Not everyone is enthusiastic about this potential development. Different experts do not agree with the idea of continuing to rely on oil companies and promoting the fossil fuel industry. But there are also, at least for now, technical limitations to this technology.

A major one, especially when comparing it with the pure electrification for the automotive industry is the efficiency, or lack of. According to an analysis by the International Council of Clean Transportation (ICCT) about 48% of the renewable energy used in the synthesis process is lost in the conversion to liquid fuel which in turn, due to ICE’s efficiency of around 30% translates into a mere 15% efficiency for eFuel. On the contrary, on EVs, the energy lost is only around 10% for charging and 20% by the motor bringing efficiency up to 70%.

This point is highlighted by Mercedes COO Markus Schäfer too. In an interview with Autocar, he said that the automaker’s focus is certainly toward electric powertrain, as it is the most efficient way to utilise renewable energy.

The second important factor is the actual production cost of synthetic fuels. As mentioned earlier, right now the cost of CO2 is of $600 per ton while Carbon Engineering claims to be able to reduce it in the short-term by at least two-thirds. The same article by ICCT discusses how battery packs could soon allow bringing EVs and ICE cars to parity. In this context though is interesting to watch how much this has changed in less than a decade.

*Sources: leftBloombergNEF, rightWolfram & Lutsey, 2016, Electric vehicles: Literature review of technology costs and carbon emissions

Both the graphs even though expressed in different currencies show the drastic reduction in prices for Lithium-ion batteries that happened in just 10 years. So, there are contrasting claims coming from different parties involved with Bosch announcing that by 2030 the eFuel price will be €1.2 per litre and ICCT saying €4 would be an optimistic estimate. With battery packs price decreasing by 85 to 90% in the same time frame it is possible to expect a similar decrease in eFuel costs, as it happens for almost every new technology as it is gradually adopted by the mass market.

CONCLUSIONS

The options opened by this technology are varied and some appear really promising. Certainly, a mix of the two would at least grant major flexibility to automakers and a wider ground for competition. A crucial factor that cannot be discounted will be the approach of government regulations on this topic. Subsidies and rebates have proven necessary in the past years to foster the EV diffusion but have also ended up being double-edged swords once a government decided to revoke them.

Within the luxury performance segment, eFuels represent the best hope for ICE enthusiasts and drivers. Being able to save the combustion engine for the foreseeable future, would allow traditional automakers to preserve the engine sound and avoid the excessive vehicle weight, maintaining intact the driving experience and ultimately the status quo in the market niche.

The Heist is Porsche’s video released at the beginning of 2020 and it is also the most-viewed automotive commercial on YouTube with almost 22 million views reached in a matter of months. The video promotes the new all-electric Taycan in a clever way but does even more.

*EDIT: After reaching over 24 million, the video has been deleted from the company's official Channel

I talked about Porsche’s strategy for its upcoming electric lineup previously and you can find the full article here Porsche EV Development Strategy. The video is not only fun but along with the characteristics of the vehicle, it cleverly shows what the brand is really about by appealing to people’s emotions. It sells a lifestyle in an engaging way.

WHY IT IS IMPORTANT AND WHY IT WORKS?

A research by McKinsey shows Over-the-top services, such as YouTube, have the highest CAGR compared to all the other sub-sectors with, of course, Digital Advertising and Video Games as close seconds. This data clearly shows why efforts in this sector and more and more relevant, and likely to become so even more in the future. For insights on the Video Games industry applied to automotive have a look at the previous article How Covid-19 Turbocharged the E-Sports Racing Industry.

*Source:McKinsey©

There are different factors that contribute to the success of this video. One is its length. According to McKinsey, the habit of consuming ‘bite-sized’ content stems just from platforms such as YouTube or Instagram. The 2:31 minute length of the video results ideal then for major consumption, which is proven by other companies’ videos of similar genre and length performing above the average, while longer ones tend to get less attention.

PORSCHE’S YOUTUBE CHANNEL VIDEOS VIEWS COUNT (IN MILLIONS) AGAINST LENGTH

*The Heist video and two full races videos have not been included in the graph as too far from the average in terms of views and length respectively.

The graph above confirms McKinsey’s data but shows some other interesting detail. For instance, short videos, between 1 and 3 minutes, show a high fluctuation in views figures, from over 10 million to a few hundred thousand (this is partially due to the fact that it is also the most popular type of video), this fork gradually reduces toward lower numbers as the video length grows. Another interesting observable data is that truly short videos below 1 minute instead (at least in Porsche’s case) tend to receive considerably less interest compared to slightly longer ones.

In the same research are described three tools that brands can use to grow and improve customers’ loyalty.

The first is Distinctive content creationthat focuses on specific strategic goals. David Ogilvy considered the Father of Advertising, in his book expresses some similar concepts that can be applied to the modern market. One is “Compromise has no place in advertising. Whatever you do, go the whole hog” (Confession of an Advertising Man, 1963). “The Heist” is indeed built around few visual, well-highlighted points. The car electric powertrain, its performance, and its desirability. As for the strategic focus, it is of course the aim at becoming the leader of the luxury performance EV segment helped by the fact of being significantly ahead of the competition.

The video is also distinctive in the sense that Porsche plays showing characteristics of their car indirectly. From its silent powertrain when it is first stolen from the museum without anyone noticing, to its performance when it is always ahead of the others and is actually the car being chased. They also establish an emotional connection when in the end the characters almost compete to be the next to drive the Taycan.

Most of all though, everything is tied together by engaging storytelling. Even in such a short video, which is what makes it an even greater example, there are unexpected elements and appealing visuals that make the viewer want to watch until the end.

At the same time also, Porsche makes sure to remind us about its status in the automotive world. At the beginning we are shown its beautiful museum, then comes a consistent chunk of its history with the cars selected for the chase. From a tractor Porsche-Diesel Standard 218 to the racing legacy with the 917K in the Gulf Oil livery, and various classic and modern road cars and limited editions, 718 Cayman, 911, GT2RS, 918 Spyder. All come, of course, after the EV Taycan.

The second factor is Content Curation to maximise engagement. The original idea behind the video proves the Porsche team's understanding of its fans and customer base. So it does the rest of its online presence.

The graph here shows clearly how despite not being the first brand in terms of following in his segment, Porsche manages to obtain far more engagement than all the other brands. This indicates knowledge of the niche and a consistent strategy to give the right media experience, which is key as the overall content published online multiplies exponentially every day and it becomes more and more difficult to gain attention. You can also see how the company fares against its competitors on the other major platforms here Automotive Social Media Marketing: Why Lamborghini is Winning.

The third tool regards the gradual consolidation of the media industry, especially regarding online streaming outlets, which gives companies the opportunity to access better data to gain insights about customer preferences and trends. This factor refers to the wider strategy and is thus not applicable to this specific case.

WHAT ABOUT OTHER AUTOMAKERS?

The whole industry is adapting to a finer, more creative, emotionally, and visually appealing online communication.

Within the same market niche, Lamborghini's social media marketing actually gets the strongest results of all on multiple platforms. On YouTube it achieves similar results with its two most successful campaigns called Lamborghini Real Lover and A true Christmas Story for Lamborghini’s real lovers discussed previously here Automotive Social Media Marketing: Why Lamborghini is Winning and now counting respectively 17.9 and 8.1 million views. Despite the different narratives, in this instance, Lamborghini’s storytelling also appeals to people’s emotions epitomising the supercar dream through the children's imagination.

Ferrari is also gradually moving in a similar direction. The best example of this is the video for the latest addition to the lineup, the Roma. In their official video, which is already the second most viewed of their channel, Ferrari presents the whole concept behind the new model through music and suggestive images. This makes particular sense as the model aims at a new market niche previously not completely covered by the brand and well represented here by the ‘La Nuova Dolce Vita’concept.

McLaren does it as well very cleverly and in its own way with the 2019 GT presentation which is too the most viewed commercial on its channel. And replicates original ideas for other models too such as the P1 or the latest 765LT.

As for the other British automakers, Aston Martin brings an amazing example of storytelling with the SUV DBX introduction which probably gets the timing wrong though. The video, in fact, has been published only a few days ago, while the car has unfortunately already been teased, presented, and reviewed several weeks ago.

Finally, at the beginning of the video, I specified that ‘The Heist’ is the most viewed automotive commercial. It is not in fact the most-viewed automotive video. This honour goes to Bugatti’s Chiron 0-400-0 video. I did not include this in my review, as the company has such a selected customer base, with its super-low production volume that the business model and communication are, as a result, substantially different. The video is a pure performance demonstration.

Is probably not a case then that both Pagani and Koenigsegg most viewed videos are performance demonstrations respectively for the Zonda R and Agera RS. The two competitors like Bugatti have a production of fewer than 100 cars per year which all sell for way above £1 million. Along with luxury, rarity, and high prices then, it is engineering at the absolute extreme that has to represent these companies. Of course, fewer resources allocated to online marketing in this case is likely a major variable for these three really small companieswhen compared to the aforementioned luxury automakers.

SOME CONCLUDING THOUGHTS

Porsche as for its EV development shows vision and market knowledge. As online media and virtual entertainment continue to gain traction though, competitors’ strategy aligns with successful content, and the quality level grows accordingly and increasingly faster. This means that more of this and even better can be expected in the future, but also that incoming VR and AR integrations are likely to bring a further leap forward soon.

Why Porsche went for the Taycan as their first model in the EV segment? Why are they planning on offering other models only as EVs while others will have different platforms options?

THE FIRST ELECTRIC PORSCHE

The long-rumoured Porsche Taycan EV, first called Mission E, has lived up to the expectations receiving worldwide praise. Porsche is still mostly famous for its sportscar thanks to which it earns most of its reputation both on the streets and on the racetrack. As for the sales figures instead, the SUVs dominate its market share. What is interesting though is that this most awaited new model does not fit completely in any of the two categories.

*Source:Porsche©

This new article is numbered because I want this to become a regular series for me to revisit and analyse unique or particularly innovative marketing campaigns. Marketing Racing is about the competition within the luxury performance automotive industry and the companies’ race to new and effective marketing solutions.

One of the most interesting examples in the last few years is that of the limited-edition Porsche GT2 RS. Stuttgart manufacturer’s fastest road-legal car, that in September 2017 set the record of 6:47.25 for the fastest lap of the Nürburgring Nordschleife completing it 10 seconds quicker than the £800,000 918 Spyder.

While one might expect a special car like this one to be presented at some exclusive event or big international auto show, this was not the case. Porsche surprised everyone by unveiling its most powerful 911 ever in June 2017 at the E3 (which stands for Electronic Entertainment Expo) convention in Los Angeles. A video gaming conference.

HOW AND WHY DID PORSCHE DECIDE TO USE THIS UNCONVENTIONAL PLATFORM FOR SUCH AN IMPORTANT MILESTONE?

Two months earlier, in April 2017, the company at the New York International Auto Show announced a 6-year partnership with Microsoft. This naturally interested specifically the Xbox’s most important racing titles Forza Motorsport and Forza Horizon. This was an important move for numerous reasons.

Another reason was perfectly explained by Porsche’s board member and Sales & Marketing Executive Detlev von Platen who said: “Racing games and eSports connect the real and virtual worlds and enable us to gain further access to the young target group. It means that they can develop a passion for Porsche even before buying their first sports car”. This has not changed in 2019/2020, if possible, the competition in this segment has even got fiercer.

Official eSports events related to motorsport and automotive have become a regular occasion for companies to show off new products or raise brand awareness. For instance, the Formula 1 eSport championship throughout the years has become bigger and more influential up to 2019 when every single F1 team had its own official eSport representative in the championship. The same was for the 2019 FIA certified Gran Turismo championship finals in Monaco, where Aston Martin invited internet personalities to participate by giving them the opportunity to arrive in Monaco driving one of their cars. There is no denying then that for car manufacturers video games have become extremely relevant. They improve brand recognition while targeting a young audience of future fans and potential buyers, yet no one has done what Porsche did with the GT2 RS.

This leads me to the next point: the first-mover advantage. Even though not in the strict sense of the term, considering that a new partnership is not as complicated or time-consuming as for example entering a foreign market, this decision paid-off also in terms of visibility simply for its originality and boldness.

CES in Las Vegas, a show focused on consumer electronics, that often hosts video games related exhibitions, has also seen an increasing involvement of car manufacturers, as more and more technological integrations enter cars, especially with electrification and connectivity. Porsche itself had previously a 16-year-long licensing deal with Electronic Arts that gave the developer exclusive rights on the use of Porsche cars’ image, apart from rare minor deals with other houses. It started in 2000 with a branded game called Need for Speed – Porsche Unleashed and continued in numerous titles. The license contract ended in December 2016, right on time for the new one to be signed.

Finally, being an ongoing partnership this one between Porsche and Microsoft, the German manufacturer has also a competitive advantage over other companies for the future as well. With a franchise that is arguably one of the biggest if not the biggest in its genre right now, Porsche has ensured itself a great, and potentially preferential, exposure to a young audience while not excluding its presence from other franchises and gaming platforms.