Will Tesla be able to maintain its lead in the EV market for very long?

This is one of the most pressing issues in the American auto sector today. One positive aspect of Tesla is the company's devoted customer base and recognizable name recognition (similar to Apple). It also invests more in research and development per vehicle than its rivals and has a head start in EV production.

Conversely, established automakers like Volkswagen are actively plotting their strategy to surpass Tesla. As the current market leaders, they have decades of experience in the auto industry and are spending billions to catch up.

We've visualized data from the EPA's 2022 Automotive Trends Report to bring you up to speed on this developing story.

Info for the Model Year of 2021

The full production data used in this infographic is for the 2021 model year, but it comes from a report for 2022.

Combined EV and PHEV output is shown in the table below (plug-in hybrid electric vehicle).

It is important to note that Toyota and Stellantis, the two largest legacy automakers in this dataset, only produced PHEVs. Toyota's first electric vehicle, the bZ4X, won't hit the market until 2023.

Stellantis seems to be falling even further behind, despite having enormous unrealized potential in its Jeep and Ram brands. Stellantis CEO Carlos Tavares said in a recent interview that the firm has budgeted $36 billion for electrification and software.

Legacy Brands with the Most Momentum

In the race to develop electric vehicles, some long-standing manufacturers have gotten the jump on their rivals.

Volkswagen, one of these storied manufacturers, has made a significant investment in electric vehicles (EVs) in the wake of the Dieselgate scandal. The company plans to roll out multiple EV models, including the ID.3 hatchback, ID.4 SUV, and ID. Buzz, with the goal of producing 22 million EVs by 2028. (an electric revival of the classic Microbus).

Even Ford is keeping up, having just announced an EV investment of $22 billion between 2021 and 2025. In November of 2022, the company manufactured their 150,000th Mustang Mach-E, and by the end of 2023, they hoped to have 270,000 of them in circulation.

Additionally, over 200,000 F-150 Lightnings have been reserved since Ford announced the truck. The Lightning is scheduled to have a production run of 15,000 in 2022, 55,000 in 2023, and 80,000 in 2024. Ford's main competitor in the electric pickup truck segment, Rivian, is on track to sell 25,000 vehicles by 2022.

Digital influences that mimic humans are rising.

Lil Miquela has 3M Instagram followers, 3.6M TikTok followers, and 30K Twitter followers. She's been on the covers of Prada, Dior, and Calvin Klein magazines. Miquela released Not Mine in 2017 and launched Hard Feelings at Lollapazoolas this year. This isn't surprising, given the rise of influencer marketing.

This may be unexpected. Miquela's fake. Brud, a Los Angeles startup, produced her in 2016.

Lil Miquela is one of many rising virtual influencers in the new era of social media marketing. She acts like a real person and performs the same tasks as sports stars and models.

The emergence of online influencers

Before 2018, computer-generated characters were rare. Since the virtual human industry boomed, they've appeared in marketing efforts worldwide.

In 2020, the WHO partnered up with Atlanta-based virtual influencer Knox Frost (@knoxfrost) to gather contributions for the COVID-19 Solidarity Response Fund.

Lu do Magalu (@magazineluiza) has been the virtual spokeswoman for Magalu since 2009, using social media to promote reviews, product recommendations, unboxing videos, and brand updates. Magalu's 10-year profit was $552M.

In 2020, PUMA partnered with Southeast Asia's first virtual model, Maya (@mayaaa.gram). She joined Singaporean actor Tosh Zhang in the PUMA campaign. Local virtual influencer Ava Lee-Graham (@avagram.ai) partnered with retail firm BHG to promote their in-house labels.

In Japan, Imma (@imma.gram) is the face of Nike, PUMA, Dior, Salvatore Ferragamo SpA, and Valentino. Imma's bubblegum pink bob and ultra-fine fashion landed her on the cover of Grazia magazine.

Lotte Home Shopping created Lucy (@here.me.lucy) in September 2020. She made her TV debut as a Christmas show host in 2021. Since then, she has 100K Instagram followers and 13K TikTok followers.

Liu Yiexi gained 3 million fans in five days on Douyin, China's TikTok, in 2021. Her two-minute video went viral overnight. She's posted 6 videos and has 830 million Douyin followers.

China's virtual human industry was worth $487 million in 2020, up 70% year over year, and is expected to reach $875.9 million in 2021.

Investors worldwide are interested. Immas creator Aww Inc. raised $1 million from Coral Capital in September 2020, according to Bloomberg. Superplastic Inc., the Vermont-based startup behind influencers Janky and Guggimon, raised $16 million by 2020. Craft Ventures, SV Angels, and Scooter Braun invested. Crunchbase shows the company has raised $47 million.

The industries they represent, including Augmented and Virtual reality, were worth $14.84 billion in 2020 and are projected to reach $454.73 billion by 2030, a CAGR of 40.7%, according to PR Newswire.

Advantages for brands

Forbes suggests brands embrace computer-generated influencers. Examples:

1. Unlimited creative opportunities: Because brands can personalize everything—from a person's look and activities to the style of their content—virtual influencers may be suited to a brand's needs and personalities.

2. 100% brand control: Brand managers now have more influence over virtual influencers, so they no longer have to give up and rely on content creators to include brands into their storytelling and style. Virtual influencers can constantly produce social media content to promote a brand's identity and ideals because they are completely scandal-free.

3. Long-term cost savings: Because virtual influencers are made of pixels, they may be reused endlessly and never lose their beauty. Additionally, they can move anywhere around the world and even into space to fit a brand notion. They are also always available. Additionally, the expense of creating their content will not rise in step with their expanding fan base.

4. Introduction to the metaverse: Statista reports that 75% of American consumers between the ages of 18 and 25 follow at least one virtual influencer. As a result, marketers that support virtual celebrities may now interact with younger audiences that are more tech-savvy and accustomed to the digital world. Virtual influencers can be included into any digital space, including the metaverse, as they are entirely computer-generated 3D personas. Virtual influencers can provide brands with a smooth transition into this new digital universe to increase brand trust and develop emotional ties, in addition to the young generations' rapid adoption of the metaverse.

5. Better engagement than in-person influencers: A Hype Auditor study found that online influencers have roughly three times the engagement of their conventional counterparts. Virtual influencers should be used to boost brand engagement even though the data might not accurately reflect the entire sector.

Concerns about influencers created by computers

Virtual influencers could encourage excessive beauty standards in South Korea, which has a $10.7 billion plastic surgery industry.

A classic Korean beauty has a small face, huge eyes, and pale, immaculate skin. Virtual influencers like Lucy have these traits. According to Lee Eun-hee, a professor at Inha University's Department of Consumer Science, this could make national beauty standards more unrealistic, increasing demand for plastic surgery or cosmetic items.

Other parts of the world raise issues regarding selling items to consumers who don't recognize the models aren't human and the potential of cultural appropriation when generating influencers of other ethnicities, called digital blackface by some.

Meta, Facebook and Instagram's parent corporation, acknowledges this risk.

“Like any disruptive technology, synthetic media has the potential for both good and harm. Issues of representation, cultural appropriation and expressive liberty are already a growing concern,” the company stated in a blog post. “To help brands navigate the ethical quandaries of this emerging medium and avoid potential hazards, (Meta) is working with partners to develop an ethical framework to guide the use of (virtual influencers).”

Despite theoretical controversies, the industry will likely survive. Companies think virtual influencers are the next frontier in the digital world, which includes the metaverse, virtual reality, and digital currency.

In conclusion

Virtual influencers may garner millions of followers online and help marketers reach youthful audiences. According to a YouGov survey, the real impact of computer-generated influencers is yet unknown because people prefer genuine connections. Virtual characters can supplement brand marketing methods. When brands are metaverse-ready, the author predicts virtual influencer endorsement will continue to expand.

A top-down company plan facilitates decision-making and impresses investors.

A startup business plan starts with the product, the target customers, how to reach them, and how to grow the business.

Bottom-up is terrific unless venture investors fund it.

If it can prove how it can exceed $100M in sales, investors will invest. If not, the business may be wonderful, but it's not venture capital-investable.

As a rule, venture investors only fund firms that expect to reach $100M within 5 years.

Investors get nothing until an acquisition or IPO. To make up for 90% of failed investments and still generate 20% annual returns, portfolio successes must exit with a 25x return. A $20M-valued company must be acquired for $500M or more.

This requires $100M in sales (or being on a nearly vertical trajectory to get there). The company has 5 years to attain that milestone and create the requisite ROI.

This motivates venture investors (venture funds and angel investors) to hunt for $100M firms within 5 years. When you pitch investors, you outline how you'll achieve that aim.

I'm wary of pitches after seeing a million hockey sticks predicting $5M to $100M in year 5 that never materialized. Doubtful.

Startups fail because they don't have enough clients, not because they don't produce a great product. That jump from $5M to $100M never happens. The company reaches $5M or $10M, growing at 10% or 20% per year.  That's great, but not enough for a $500 million deal.

Once it becomes clear the company won’t reach orbit, investors write it off as a loss. When a corporation runs out of money, it's shut down or sold in a fire sale. The company can survive if expenses are trimmed to match revenues, but investors lose everything.

When I hear a pitch, I'm not looking for bright income projections but a viable plan to achieve them. Answer these questions in your pitch.

• Is the market size sufficient to generate $100 million in revenue?

• Will the initial beachhead market serve as a springboard to the larger market or as quicksand that hinders progress?

• What marketing plan will bring in $100 million in revenue? Is the market diffuse and will cost millions of dollars in advertising, or is it one, focused market that can be tackled with a team of salespeople?

• Will the business be able to bridge the gap from a small but fervent set of early adopters to a larger user base and avoid lock-in with their current solution?

• Will the team be able to manage a $100 million company with hundreds of people, or will hypergrowth force the organization to collapse into chaos?

• Once the company starts stealing market share from the industry giants, how will it deter copycats?

The requirement to reach $100M may be onerous, but it provides a context for difficult decisions: What should the product be? Where should we concentrate? who should we hire? Every strategic choice must consider how to reach $100M in 5 years.

Focusing on $100M streamlines investor pitches. Instead of explaining everything, focus on how you'll attain $100M.

As an investor, I know I'll lose my money if the startup doesn't reach this milestone, so the revenue prediction is the first thing I look at in a pitch deck.

Reaching the $100M goal needs to be the first thing the entrepreneur thinks about when putting together the business plan, the central story of the pitch, and the criteria for every important decision the company makes.

How did his money blind me?

Like most fledgling entrepreneurs, I wanted a mentor. I met as many nearby folks with "entrepreneur" in their LinkedIn biographies for coffee.

These meetings taught me a lot, and I'd suggest them to any new creator. Attention! Meeting with many experienced entrepreneurs means getting contradictory advice. One entrepreneur will tell you to do X, then the next one you talk to may tell you to do Y, which are sometimes opposites. You'll have to chose which suggestion to take after the chats.

I experienced this. Same afternoon, I had two coffee meetings with experienced entrepreneurs. The first meeting was with a billionaire entrepreneur who took his company public.

I met him in a swanky hotel lobby and ordered a drink I didn't pay for. As a fledgling entrepreneur, money was scarce.

During the meeting, I demoed the software I'd built, he liked it, and we spent the hour discussing what features would make it a success. By the end of the meeting, he requested I include a killer feature we both agreed would attract buyers. The feature was complex and would require some time. The billionaire I was sipping coffee with in a beautiful hotel lobby insisted people would love it, and that got me enthusiastic.

The second meeting was with a young entrepreneur who had recently raised a small amount of investment and looked as eager to pitch me as I was to pitch him. I forgot his name. I mostly recall meeting him in a filthy coffee shop in a bad section of town and buying his pricey cappuccino. Water for me.

After his pitch, I demoed my app. When I was done, he barely noticed. He questioned my customer acquisition plan. Who was my client? What did they offer? What was my plan? Etc. No decent answers.

After our meeting, he insisted I spend more time learning my market and selling. He ignored my questions about features. Don't worry about features, he said. Customers will request features. First, find them.

Putting your faith in results over relevance

Problems plagued my afternoon. I met with two entrepreneurs who gave me differing advice about how to proceed, and I had to decide which to pursue. I couldn't decide.

Ultimately, I followed the advice of the billionaire.

Obviously.

Who wouldn’t? That was the guy who clearly knew more.

A few months later, I constructed the feature the billionaire said people would line up for.

The new feature was unpopular. I couldn't even get the billionaire to answer an email showing him what I'd done. He disappeared.

Within a few months, I shut down the company, wasting all the time and effort I'd invested into constructing the killer feature the billionaire said I required.

Would follow the struggling entrepreneur's advice have saved my company? It would have saved me time in retrospect. Potential consumers would have told me they didn't want what I was producing, and I could have shut down the company sooner or built something they did want. Both outcomes would have been better.

Now I know, but not then. I favored achievement above relevance.

Success vs. relevance

The millionaire gave me advice on building a large, successful public firm. A successful public firm is different from a startup. Priorities change in the last phase of business building, which few entrepreneurs reach. He gave wonderful advice to founders trying to double their stock values in two years, but it wasn't beneficial for me.

The other failing entrepreneur had relevant, recent experience. He'd recently been in my shoes. We still had lots of problems. He may not have achieved huge success, but he had valuable advice on how to pass the closest hurdle.

The money blinded me at the moment. Not alone So much of company success is defined by money valuations, fundraising, exits, etc., so entrepreneurs easily fall into this trap. Money chatter obscures the value of knowledge.

Don't base startup advice on a person's income. Focus on what and when the person has learned. Relevance to you and your goals is more important than a person's accomplishments when considering advice.