Tesla Plans to Enter Advertising, Musk Says

After avoiding traditional marketing, Tesla revealed its plans to enter advertising for its electric vehicle offerings. This was revealed by CEO Elon Musk during the annual shareholders' meeting of the company.

Planning to Enter Advertising

Musk revealed during the annual shareholders' meeting that Tesla will try a "little" advertising. According to Bloomberg's report, this decision is a major shift for the company as it avoided traditional marketing ever since it launched. Tesla already built a certain market despite not paying for television, radio, or printed advertisements.

Historically, the company only relied on word of mouth and natural marketing. Musk has been famously vocal about his stance on advertising, despite some fans and investors suggesting to try it in the past years. However, he consistently pushed back against the idea, saying that he hates advertising in a response from Twitter.

Musk has also used his latest platform acquisition Twitter as a marketing channel for Tesla where he shows teasers and updates for upcoming releases. But when an attendee of the meeting asked if he would reconsider his stance, Musk said on Tuesday, "We'll try out a little advertising and see how it goes."

He added that he will continue to say what he thinks on his Twitter account, even if it causes some advertisers to abandon the platform. Some companies have reportedly pulled ads from the platform after facing criticism from its crowd-sourced fact-checking feature Community Notes. While Musk did not name any advertisers, he said that it cost Twitter $40 million.

As per CNBC, other highlights of the meeting included the announcement of delivers for its first batch of Cybertrucks this year, the company's position for the long run, planning to push 'Model Y' as the top-selling car, and Redwood Materials' current Chief JB Straubel designation as an independent director of the board.

Advertising Money

Electrek reported that Musk was surprised with the enthusiasm of Tesla investors despite making it sound like it would just be on a trial period. He made it clear that he was not impervious to the irony of him poking fun at his rivals for years, relying on advertising to sell their offerings. Some of them spent $4,000 per vehicle sold in advertising.

Instead of relying on advertising and endorsements, Tesla stated that it uses its earnings to improve its products. But this shift might be the company's new strategy to keep demand in line as it recently increased its production capacity, which led them to rely on cutting prices.

The CEO added that it approaches content if the ads will be informative and entertaining. Musk believes that Tesla is capable of producing ads like that in the future that will also focus on some of the company's lesser-known features to boost them up.