Apr 4, 2024 - Business

Musk's marketing play

Illustration of a vintage advertisement of a man pointing at the Tesla logo

Illustration: Sarah Grillo/Axios

Tesla is investing more in marketing and advertising amid market headwinds, a decline in sales and rising EV competition from China.

Why it matters: Given Tesla CEO Elon Musk's history with communications and marketing, his interest in pulling these business levers now feels noteworthy.

Zoom in: Thus far, Tesla's ads have been limited to digital and can be seen across social media platforms like YouTube, Facebook, Instagram and X.

Between the lines: The EV maker previously relied on word of mouth, owned content and Musk's executive profile and cache to build a following. However, Tesla must expand its reach to keep up with the increasingly competitive market.

  • "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," Musk told shareholders in 2023.

By the numbers: According to the Wall Street Journal, Tesla spent just $175,000 on advertising in 2022, compared to $6.4 million in 2023.

What to watch: Because the operating software on EVs allows for updates, the depreciable asset narrative around cars could be changing.

  • These vehicles could be marketed similarly to electronic devices like phones and computers — which would explain why automakers have been scooping up communications talent from the tech sector.

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