Tesla CEO Elon Musk said the company will try conventional advertising, marking a shift from the electric vehicle maker’s approach to sales.
Musk said this on Tuesday during the automaker’s 2023 annual meeting of shareholders. The shift is coming amid growing competition in the EV market and dwindling sales that have seen Tesla lost its dominant position in markets like China.
Tesla is known for not paying for conventional advertising, relying on other avenues of marketing to promote its products. The automaker uses emails, word-of-mouth and referrals in addition to Musk’s tweets, which promote Tesla models, to reach a large audience.
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“Our owners become our ambassadors,” Musk told Advertising Age in 2010 when Tesla was celebrated as one of “America’s hottest brands.”
Tesla’s key to successful unconventional advertising is its reliance on the quality of its products. This, boosted by word-of-mouth from early customers, helped the company to its status as a leader in the EV industry.
Tesla’s market value has plummeted by more than half since April last year – a development largely attributed to Musk’s acquisition of Twitter and he spending more time running the social media company while paying less attention to Tesla.
China’s BYD recorded the highest sales in 2022 with sales of 1.86 million electric cars while Tesla was left a distant second with 439,770 China-made vehicles delivered to locals. Tesla announced price cuts for some of its car models across its markets as the downturn in sales mounts.
Musk has also lost his place as the world’s richest man to Louis Vuitton’s Bernard Arnault as Tesla shares Plunged.
Against this backdrop, Musk is willing to give traditional advertising a try as Tesla pushes to regain its dominance in China and other EV markets.
“We’ll try a little advertising and see how it goes,” TechCrunch quoted Musk as saying Tuesday in response to a question from Kevin Paffrath, AKA Meet Kevin, a YouTuber and financial analyst whose ETF ticker, PP, counts Tesla as its largest position.
Musk agreed with Paffrath that Tesla could advertise features like over-the-air updates that improve airbag deployments, or counter common beliefs that Teslas are “super expensive” when in reality “the starting price for Tesla is below the average car price in the U.S.”
He said that in his experience as CEO of Twitter, a company that is highly dependent on advertising, has shown him that “advertising is awesome, and everyone should do it.”
“I think I hear your sort of larger point, which is that there are amazing features and functionality about Teslas that people just don’t know about, and although there’s obviously a lot of people that follow the Tesla account and my account…it is preaching to the choir, and the choir is already convinced,” he said.