May 17, 2023 - Economy

Tesla to start advertising more

Photo illustration: Sarah Grillo/Axios. Photo: Liesa Johannssen-Koppitz/Bloomberg via Getty Images

Tesla will test the waters with "a little" paid advertising as CEO Elon Musk's mind has been changed since running Twitter, an ad-driven company.

Why it matters: Musk's reversal comes as Tesla's global dominance in selling electric vehicles faces an onslaught of competition from legacy car brands and upstarts alike.

Driving the news: “Here I am, never used advertising really before, and now [I] have a company that’s highly dependent on advertising," Musk told Tesla shareholders yesterday.

  • He also acknowledged that what used to work to fuel Tesla's success — its online fanbase driven in part by Twitter — has hit a limit.

Zoom in: "There's obviously a lot of people that follow the Tesla account and my account on Twitter — to some degree it is preaching to the choir and the choir is already convinced."

  • The audience erupted in applause and cheers after Musk said he would test ads.

Flashback: Tesla has dabbled in paid promotions and advertising sparingly.

  • Musk in the past has also hinted at the value of ads to counter perceived media bias about the company.

The big picture: Musk's latest stance comes on the heels of his decision last week to appoint former NBCUniversal ad chief Linda Yaccarino as CEO of Twitter, who will take over from him in a few weeks.

What to watch: In an interview with CNBC following the shareholders meeting, Musk said his advertising strategy is not "fully formed," because it was something he decided on in the moment on stage when asked why Tesla doesn't advertise more of the cars' features.

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