To advertise or not to advertise, that’s the big question. At least that was the big question until Elon Musk at the company’s Investor Day presentation suddenly announced that Tesla would start advertising.
Musk’s announcement was unexpected since Tesla in its history had never paid to run a single ad. Tesla’s rather controversial decision to not advertise was largely based on Elon Musk’s belief that rather than advertising automakers should focus on improving their product.
Ford CEO Jim Farley Shares a Video of F-150 Lightning Going Toe-to-Toe With a @Tesla Cybertruk in 1st Off-Roading Show-Down. @elonmusk @jimfarley98 @Ford#teslahttps://t.co/dmhcdkVig0
— Torque News (@torquenewsauto) November 15, 2023
Musk believes, that if the product is compelling enough, it will sell itself. This belief severed Tesla well for almost a decade and a half when the EV maker’s sales grew exponentially year over year.
At its peak, demand for Tesla vehicles was so high that waiting times between ordering a vehicle and delivery ballooned to over a year for some Tesla variants. Tesla, in response, raised prices which increased the EV maker’s gross margin to over 35%.
This was Tesla’s reality in 2022 however, in the second half of 2022 and the rest of this year, the US Federal Reserve started hiking interest rates which put an end to the party.
Currently, interest rates are at a multi-decade high and according to Tesla, customers are paying an average of 9% interest on their Tesla loans.
This coupled with the fact that Tesla has grown vehicle production by over 50% for several years, Tesla was forced to significantly cut down vehicle prices to keep up sales in line with production.
Tesla’s decreasing profit per vehicle coupled with pressure from vocal shareholders, the EV maker did a 180 in its advertising policy and started running ads.
Tesla Bans Individuals Who Share a Leaked Cybertruck Video Shot by a Tesla Employee From Attending November 30 Delivery Event. @Tesla @elonmusk#TeslaNews
— Torque News (@torquenewsauto) November 15, 2023
This brings us to now, for the past few months Tesla has been trying out several advertising strategies with the EV maker’s ads popping up alongside searches for Toyota vehicles and on billboards in airports.
Last month, Musk promised that Tesla would be rolling out a large ad campaign once the EV maker figures out what strategy works best. However, Musk emphasized that Tesla ads should be targeted at educating the public about the EV maker’s product rather than celebrity endorsements or flashy deception.
And as Tesla continues experimenting with various advertising strategies, the EV maker has now gone to YouTube and started rolling out the company’s first YouTube ad.
YouTube is the largest video platform and has billions of daily active users which makes it ideal for advertising for cars which more than other products rely on video demonstration to convince sales.
So what does Tesla’s first YouTube ad look like? Did the EV maker completely sell out its beliefs and get a celebrity endorsement? Nope. Tesla’s YouTube ad is a true Teslaeque video where the ad focuses on educating the public that Teslas are the safest vehicle out on the road.
In the video, we can see a Model Y undergoing a safety test and being crushed by what appears to be a Chevrolet Silverado pickup truck. Tesla engineers are also heard saying…
“we’re the only car manufacturer in the world that has a fleet of more than a million vehicles out on the road fully instrumented from a sensing perspective. We can know exactly where the seat is, we can know where the steering wheel is, and we know when the airbag deployed exactly to the millisecond. We’ve more data now than we’ve ever had before. We can understand real exposure and then we can design our vehicles for that exposure”
Tesla ends the video by highlighting the Model 3’s affordability with a displayed message reading “The Model 3 starts at $31,490 after Federal Tax Credit.” Finally, the link associated with the ad leads to a website for a test drive.
Overall this is a very good ad. In a concise manner and within just a few seconds highlights some of Teslas’ biggest advantages including safety and affordability, and invites viewers to test drive a vehicle and experience the addictive performance.
As a start, we give this Tesla ad a very high mark and we’ll be sure to keep you posted as Tesla expands the company’s ad campaign. Until then, make sure to visit our site torquenews.com/Tesla regularly for the latest updates.
So what do you think? Do you think it was a good idea to show a Model Y being run over by a pickup in the first-ever YouTube ad? What advice would you have for Tesla in terms of advertising going forward? Let us know your thoughts in the comments below.
Image: Courtesy of Tesla, Inc.
For more information check out: A Tesla Cybertruck Goes Face-to-Face Against a Rivian R1T in 1st Off-Road Comparison
Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.