Tesla Doesn't Need to Advertise
There are many people saying that Tesla needs to advertise in order to reach its 20 million per year vehicle goal. Is this true? Let's take a look.
During the recent Super Bowl in the U.S., Tesla received a spike in website traffic as interest in its EVs (electric vehicles) jumped. Why did this happen if Tesla didn't advertise at all?
This happened because Tesla's competitors advertise their EVs and potential customers for those EVs went and did research to see comparable EVs and came across Tesla. Any reasonable consumer is going to do comparison shopping when looking for a product in order to get the best value for their dollars.
I know a woman who has an Iridescent Tesla, and she bought a Tesla Model Y because she saw one on the road while driving and became curious about it. Most likely, she investigated the vehicle and what it had and determined it to be a great buy.
Most people who buy a Tesla hear about the company from word of mouth or see one on the road and get curious. Tesla is also in the power position when it comes to its product due to the superior engineering and continuous improvement of its product.
Advertising says, "We need to try and hype up our product in order to get you to buy it."
Not Advertising says, "Our product will sell itself and word of mouth will spread."
I'm not saying Tesla will NEVER need to advertise. But, at this time, they do not.
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What Tesla Should Do With Its Money Instead
What should Tesla do with its billions of dollars in cash instead, if it isn't going to advertise? Tesla needs to build more giga factories. In total, it will need around 8 to 10 giga factories, depending on the types of vehicles produced at each.
Giga Mexico will be Tesla's 6th giga factory. There needs to be another one or two built in Asia or India in order to completely address that market.
Once the cash for giga factories and expansion has been spent, Tesla should then spend to get FSD and its software ready for driverless cars. That means more GPU and computer units, training data, humans labeling data, etc... The faster Tesla can get FSD to level 4, the better it will be. Elon Musk has said that a driverless fleet will greatly increase the value of the asset and will "Boggle the mind."
Tesla then should spend money improving its hardware and vehicles, making improvements and automating processes. You got a glimpse of this at Investor Day, and it is clear that Tesla has spent money hiring fantastic engineers who like to solve real world problems, like making cars faster, with less error, and for less money.
Then, you have two Twitter accounts that advertise Tesla for free:
* Elon Musk with over 130 million followers
* Tesla with almost 20 million followers
Both of these accounts advertise Tesla regularly, and the official Tesla account is pushing out updates and advertising at incredible speed. It's clear that part of Tesla's strategy is to utilize Twitter to raise awareness. Tesla may, in fact, never advertise using traditional media. It may feel like taking a step backward to Tesla, where traditional auto advertising uses gimmicks and commercials that try to make you laugh or be entertained instead of focusing on the product.
Tesla should only advertise when they've built all their giga factories and spent all their cash on ramping to 20 million or more vehicles per year. The, by all means, take some of that extra cash and advertise or hold events, or better yet, pay dividends to shareholders.
What do you think Tesla should do with its money? Should they advertise?
In Related News: Elon Musk Gives Nod to Model 3 - Project Highland
THIS IS WHY TESLA NEEDS NO ADVERTISINGTesla brings real benefits to the communities that it connects with- Jobs- Opportunities- Demand for advanced skillsIntelligent government leadership can use these things to create a bright future for their communities@elonmusk https://t.co/VtT1ff1Hjb— JPR007 (@jpr007) March 6, 2023
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.