Tesla has made it this far on reputation alone, but ads may prove crucial now that it has some real competition.
Tesla was once the big dog in the EV market, with a range of luxury vehicles largely unparalleled by other automakers. Word of mouth and the company’s shining image was enough to shift cars in bulk with virtually no marketing effort. Now, with sales flattening, the company is contemplating actually running some ads.
As reported by Engadget, the news comes from Tesla’s most recent shareholder meeting. Responding to a query from the audience about marketing, Tesla CEO Elon Musk responded that “We will try a little advertising and see how it goes.” Musk noted that his opinion on the matter changed significantly after his purchase of Twitter, with the social media company heavily dependent on advertising revenue.
According to Musk, advertising may focus on some of the unique and innovative features of Tesla’s vehicles that the broader public may be unaware of. Speaking to CNBC, he indicated the brand’s advertising should be “informative and entertaining” with a higher focus on actual content than other brand’s ads.
Historically, Tesla has gone against the grain when it comes to advertising. The company elected to save money by not putting out TV ads, billboards, or online ads to push its products to consumers. Musk had previously stated that he hated advertising and that the cash saved was instead poured into product development and other areas of the business.
That strategy worked well for the company, which was finding customers for every vehicle it could build simply through reputation and word-of-mouth. The company even famously refuses to run a PR department, essentially making it uncontactable for press queries.
Now, though, the tides have changed. Multiple drastic price cuts have failed to ignite Tesla sales in the way executives might have hoped, while other automakers are starting to shift EVs in real numbers. While the company took the top spot in US luxury car sales in the last quarter, it nonetheless faced a flattening sales curve with 2023’s Q1 production just barely ahead of Q4 last year. With the company investing big in its production facilities, it will need to find a way to shift more cars to square the ledgers going forward. It’s not all bad news though; the Q1 production results are still up a full 44% compared to the same period in 2022, with 440,808 vehicles built.
Beyond advertising, fresh product may also help spur Tesla sales. The Cybertruck is still not ready, but Musk hinted that two new models were on the way that could refresh the lineup. If that’s the case, an advertising campaign will be a great way to get the word out.
Given the huge swathe of new EVs on the market, it’s not surprising Tesla is feeling the heat. No longer can its vehicles stand alone as harbingers of the future, particularly given that the company’s models are starting to get a little long in the tooth. Now faced with real competition, it looks like Tesla will have to start battling it out for the hearts and minds of the EV-buying populace.
Got a tip? Let the author know: lewin@thedrive.com
