Are Automakers on Their Way to Ditching Radio Altogether?

In April, KYMO’s AM signal lost power temporarily, and the classic-rock radio station in East Prairie, Mo., immediately received a phone call. “Hey, what’s wrong with your station?” asked the caller, a farmer who works all day on a tractor that’s held up since the 1970s. “A lot of farm trucks have AM radios — in some cases, that’s all they have,” says Reid S. Howell, general manager and morning-show host for the station group that includes two FM stations and one AM.

Like much of the $143 billion global broadcast industry, Howell is distressed Volkswagen, Audi, Volvo and others have yanked AM from electric vehicles — and Ford announced in early April that “most new and updated 2024” models — both gas and electric — would discontinue the technology before walking it back a month later. Eight of the world’s 20 top carmakers have removed the broadcast format from electric vehicles, a move that has shaken big and small radio companies that rely on commuters for ratings and advertising. As streaming becomes more dominant in Bluetooth-equipped cars, some fear FM could be the next to go.

“No pressing issue may be bigger than the fate of radio in automotive dashboards,” longtime radio consultant Fred Jacobs wrote in early April, citing his Jacobs Media group’s listener study showing 75% of new car buyers rank Bluetooth as “very important,” compared to 71% for FM radio and just 32% for AM radio. For artists and labels, the format is even less important: “AM is not as essential. With the future of AM residing in news, talk, sports, repurposing of popular podcasts and other spoken-word entertainment, music exposure remains on the FM frequencies and streaming services,” says Skip Bishop, a former Sony and MCA radio-promotions exec who is now a Nashville consultant, but he adds: “The far-reaching AM signals could be used for artist interviews and alerting consumers to new releases.”

Forty-six million Americans overall listen to 5,000 AM radio stations per week, according to Nielsen Audio, compared to more than 2 billion global YouTube and 515 million Spotify users every month. “It’s been coming for a long time,” adds Gordon Borrell, CEO of broadcast-analyst firm Borrell Associates. “We’ve had the signal for years that the removal of terrestrial-radio boxes in cars is inevitable. It might happen 10 years from now that not a single car has an AM-FM receiver in it. If you want it, get it over your phone and plug it into the console. But it’ll take time.”

In the last few months, the National Association of Broadcasters has lobbied public officials to reverse the trend, putting out “Depend On AM Radio” talking points for stations to repeat on air. Broadcasters cite listener data: AM-FM radio represents 60% of in-car listening among adults, according to Edison Research, and AM-FM radio’s share of ad-supported audio in cars has been remarkably consistent for five years, in the 88 to 90% range. (The other 12% includes ad-supported SiriusXM, YouTube, Spotify and Pandora and podcasts.). Congress has been sympathetic to this view, as seven U.S. senators and representatives introduced a bill in late May to direct the National Highway Traffic Safety Administration to require AM radio in new vehicles at no additional cost. (The bill is pending after a hearing in June.)

Carmakers who strip AM from their in-dash audio systems will continue to face a backlash, among listeners and politicians, predicts Pierre Bouvard, chief insights officer for radio network Westwood One. “They’re going to have angry customers,” he says. “At some point, the customers are going to get upset, and maybe they’ll go find automakers that have what they want.” (A late 2021 Edison Research study showed 89% of drivers said AM or FM radio was important in their cars, compared to 85% for USB ports.)

Broadcasters emphasize AM’s emergency-signal functions, and the fact that the format can continue operating during power outages. Audacy, one of the top radio companies, recently released survey data showing 62% of car listeners use AM-FM, as do 63% of “connected” car users with access to streaming audio. “Safety is a big deal for these listeners, especially with how confusing the car dashboard has gotten. It makes it less safe,” says Reggie Shah, Audacy’s senior research and insights director. “[With] the luxury cars, it’s like, ‘The screen is beautiful, but it’s just page after page, and it’s like, ‘How do I turn the radio on?'”

Automakers say the shift away from AM radio is for technical reasons — electromagnetic interference is especially prevalent in electric vehicles, leading to static and other noise. Tesla began removing AM radio in 2018 and Volkswagen recently did the same in its electric ID.4 SUVs. “The AM radio would be interrupted with some of the electromagnetic waves from the electric motors,” says Jessica Arnston, a Volkswagen product communications senior specialist. Adds a spokesperson for Audi, which removed AM radio from electric vehicles: “The user experience is not going to be very good. Most AM radio content is also streamed over the internet and available on HD radio so there are alternative methods to get to that information.”

In addition to the loss of emergency services — seven former Federal Emergency Management Agency leaders wrote a letter to Transportation Secretary Pete Buttigieg in February, advocating to preserve AM functionality in cars — the carmakers’ moves could cause a financial hit for broadcast groups. Radio listening has been consistent for years, although it dropped during the pandemic; in 2019, according to Nielsen Media Research, 89% of American adults listened to both FM and AM stations, after which the numbers have held steady in the 84-86% range. And while on-air advertising revenue has been dropping for years, a new Borrell Associates study suggests broadcasters’ digital advertising surged in 2022 and could make up some of the losses.

If carmakers continue to yank AM stations, the trend of losing on-air advertisers but perhaps gaining digital advertisers could accelerate – a problem for smaller radio groups that don’t have an 150 million-user iHeartRadio app. (Among the app’s AM offerings: WSM, the 98-year-old Nashville country station that broadcasts Grand Ole Opry performances.) “The radio industry certainly loses revenue. We have advertisers here in Connecticut that just buy our AM stations,” says Keith Dakin, vp of programming for Connoisseur Media, which owns classic-rock station WPLR-FM in New Haven, Conn., and several East Coast AM stations. “Millions of people still listen to AM radio. Anything that takes away from free, over-the-air broadcast is bad.”