In a surprising move, electric car manufacturer Tesla has announced a departure from its long-standing aversion to traditional paid advertising. For the past twenty years, the company has relied on its customers and supporters to organically promote its brand, eschewing conventional advertising methods. Elon Musk, the CEO of Tesla, had been vocal about his distaste for advertising, but he recently had a change of heart.
During Tesla’s annual shareholder meeting, Musk revealed that the company would be venturing into advertising, stating that they would “try a little advertising” and observe the results. This decision was influenced by Musk’s realization of the value of owning Twitter, a platform heavily dependent on advertising. In response to an investor’s question, Musk acknowledged the effectiveness of advertising and mentioned that advertising cars can create demand not just in the short term but for a lifetime.
Details about Tesla’s advertising plans remain uncertain, but Musk hinted that the focus would be on creating informative and aesthetically pleasing content that highlights lesser-known features of the company’s vehicles. He believes that if executed properly, advertising can be more than just promotional material and can approach the realm of engaging content.
Musk’s announcement comes on the heels of Tesla’s decision to prioritize sales growth over profit, particularly in a challenging economic climate. To stay ahead of its competitors, the company recently lowered prices in the USA and China, even though it reported its lowest quarterly gross margin in two years. Musk justified this strategy, stating that it is preferable to sell a larger volume of cars at a lower margin now and reap the benefits of increased market share and improved autonomous technology in the future.
Tesla’s foray into advertising marks a significant departure from its previous stance, and it remains to be seen how effective its campaigns will be. Musk acknowledged that it is worth trying and emphasized that the advertising plans are still in the early stages of development. As Tesla continues to expand and innovate, its advertising endeavours may play a crucial role in sustaining its growth and reaching a wider audience.
