Tesla CEO Elon Musk said that the company is going to “try advertising” after years of resisting the idea and even saying that he “hates advertising.”
For years, Musk has famously said that he despises advertising. He said that Tesla doesn’t pay or provide discounts for celebrities to drive its cars and that the automaker doesn’t pay to advertise – though we have seen exceptions before.
Tesla fans and investors have often suggested that the company at least try it, but the CEO consistently pushed back against the idea – going as far as saying that he “hates” advertising.
However, he always was open to the idea of Tesla eventually getting into advertising when the company began “selling vehicles in higher volume.”
It looks like Tesla might have reached that milestone. When an investor brought up the idea at Tesla’s annual shareholder meeting today, the CEO was way more open to the idea and even said that Tesla would try advertising.
“We will try a little advertising and see how it goes.”
Musk said that he was surprised by the enthusiasm of Tesla investors about advertising.
He made it sound like it would be on a trial period, and before commenting, he made it clear that he wasn’t impervious to the irony of him poking fun at other automakers for years for heavily relying on advertising to sell cars.
Some automakers spend as much as $4,000 per vehicle sold in advertising.
Musk always said that Tesla uses money that other automakers spend on advertising to improve its products instead.
Tesla does not advertise or pay for endorsements. Instead, we use that money to make the product great.
But it might be time for Tesla to see if it can efficiently spend money on advertising to create demand for its vehicles. To keep demand in line with its increased production capacity, it has instead relied on cutting prices.
In a follow-up interview, the CEO said if ads are “informative and entertaining, it approaches content”. He believes that Tesla can produce such ads in the future that will focus on some of the automaker’s lesser-known features.
Electrek’s Take
This is an interesting development. I think it’s worth a try. The feedback loop, especially for an online ad, is fairly quick and it will be interesting to see the impact on demand versus further price cuts.
I can’t wait to see official Tesla ads.
That said, I wouldn’t be surprised if a majority of the Tesla ad budget ends up being spent on Twitter ads. It would be just a coincidence of course.