For the primary time in 23 years, none of America’s 4 largest automakers will air nationwide Tremendous Bowl advertisements – however foreign-owned corporations like Kia and Volkswagen are selecting up their slack. The “difficult U.S. automotive market” is a number one cause why.
Slowing shopper demand and excessive rates of interest are pressuring Ford, Toyota, GM and Chrysler dad or mum firm Stellantis into slicing again on their advert spend. Automobile commercials are a Tremendous Bowl mainstay – Stellantis alone has solely missed two prior to now 15 years – however this yr’s recreation would be the first since 2001 the place not one of the Large 4 are coughing up the estimated $7 million price for a 30-second spot, in line with AdAge’s archive.
“With a continued deal with preserving enterprise fundamentals to mitigate the impression of a difficult U.S. automotive market …we won’t be collaborating within the Large Recreation this yr,” wrote a Stellantis spokesperson in an announcement to Fortune. Toyota instructed Fortune that in lieu of an advert, it’s going to “activate on the bottom” with an “thrilling, multi-faceted activation expertise” each main as much as and in the course of the recreation, noting that it’s presently the NFL’s official automotive sponsor. GM, for its half, confirmed that none of its manufacturers would promote in the course of the Tremendous Bowl and stated it frequently updates its media methods “to ensure they align with our enterprise priorities.” Ford couldn’t be instantly reached for remark.
The EV winter?
The auto business might be going through a protracted hangover after a brutal 2023. Racing to catch as much as runaway business chief Tesla, legacy producers had collectively poured roughly $100 billion into mass-market EV manufacturing as of November, in line with Bloomberg – however gross sales lagged behind projections, prospects complained about reliability points and most fashions are nonetheless too costly for the typical shopper, even with the assistance of tax credit. Within the current brutal January winter storm and “bomb cyclone,” Teslas didn’t cost for unfortunate Chicago customers in subzero temperatures, probably as a result of they did not learn the tremendous print about “precondition” their batteries.
Not one of the corporations Fortune reached out to explicitly cited the robust 2023 EV market as the explanation for his or her Tremendous Bowl promoting pullback, however simply have a look at their earnings—the EV scramble has weighed closely on their steadiness sheets prior to now yr. Ford alone estimated in June that its EV division would price it $4.5 billion in 2023. GM walked again its EV manufacturing goal in October, citing a slowing market.
Even Tesla, the far-and-away business chief, was hit by 2023’s tough and tumble EV local weather. CEO Elon Musk’s EV large reported its first quarterly loss since 2020 final fall, and an government not too long ago admitted the corporate was in a “average low-growth interval” after a yearslong bull run. This yr hasn’t been any higher: Tesla misplaced over $94 billion in market valuation within the first two weeks of 2024—its worst begin to a yr in its historical past as a public firm—because it digests dangerous information starting from Hertz backing out a provide deal to a different worth reduce in China to costly labor prices.
A poor broader business outlook hasn’t helped the sagging EV sector, both. Though American complete auto gross sales rose 12% final yr, they’re nonetheless lagging behind pre-pandemic ranges. And cooling shopper demand – together with manufacturing disruptions reminiscent of strikes and provide chain points – paint a cloudy image for the home automotive business in 2024.
Nonetheless, EVs will take heart stage this Tremendous Bowl, as Kia promotes its newly launched EV9 SUV. Volkswagen is working an advert for the primary time in 10 years, which it teased yesterday. The German firm is celebrating its seventy fifth yr of enterprise within the US. Each corporations have been aggressively pushing their EV choices, with every reporting over 60 p.c annual gross sales development as of final October – they every promote about 3 p.c of EVs nationwide. However each nonetheless lag properly behind Tesla, which instructions a whopping 56.5 p.c of the brand new EV market.
Past financial situations, a part of the explanation the Large 4 have all handed on advertisements might be timing. Toyota, which final fall signed on because the NFL’s unique automotive associate at a reported price of as much as $50 million a yr, isn’t releasing any main new merchandise that coincide with the February 11 Tremendous Bowl date.
“I can’t consider a car that [Toyota] must promote at that degree of publicity. These advertisements are costly,” stated David Whiston, a Morningstar analyst.
This story was initially featured on Fortune.com