Tesla, the electric car company founded by CEO Elon Musk, has recently increased its advertising spending to $6.4 million in 2023, a significant jump from previous years. Despite Musk’s well-known aversion to advertising, the company has decided to invest in ads to promote its vehicles. The recent drop in Tesla’s stock value this year is a reflection of investors losing patience with the company due to challenges such as tough competition in the electric vehicle market and internal management issues.
Tesla’s new approach to addressing these challenges is reflected in the focus of its recent ads on the Model Y and their appearance on platforms such as Meta and Google. Competition from other automakers offering incentives for customers who trade in their vehicles for EVs has also contributed to Tesla’s decision to try advertising. For example, BMW has offered a $1,000 reward for customers who trade in their vehicles for one of its EVs.
While Tesla has typically relied on word-of-mouth marketing rather than advertising, the recent increase in spending signals a new approach to attracting wealthy customers seeking a sportier vehicle. The response of investors and industry observers will be closely watched as they monitor Tesla’s efforts to overcome these challenges and maintain its position as a leader in the electric vehicle market.
