If people don't know how affordable Tesla's have become (parity with Toyota Corolla's etc), they will continue to think of Tesla's as cars for rich people and not consider them. It's difficult with all the gov't rebates and recent price cuts to keep up with the numbers. The right kind of informational advertising would help with this.
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Need for Tesla Advertising / PR
- Thread starter Buckminster
- Start date
Exactly, a video showing the car driving itself and ending "starting at $34,950 with up to $7500 fed and additional state credits on top"
I honestly don't understand most of the arguments against advertising. Most of them are arguments like "Tesla is already doing great!" or "word of mouth is powerful!". These things are both true, but you cannot tell me Tesla wouldn't sell more cars or get their message out more efficiently with advertising.
IMO, it's irresponsible not to at least try it. You can do more focused advertising to begin with, maybe target certain areas with expiring local or state rebates, and see if it's cost-effective. If it's not? Bag it. But it probably will be.
People that I know that exist outside of Twitter actually know stunningly little about Teslas or EVs in general. Most people I know do not use Twitter. Places like Twitter or this messageboard are absolutely a bubble.
Also, people tout the Tesla doesn't advertise thing like it's a badge of honor. Nobody gives a *sugar*. The number of people who will NOT buy a Tesla because they saw an ad for it has to be infinitesimally small. Advertising does not have to destroy the "coolness" of the brand. This is missplaced pride to think that Tesla is somehow better than other car companies because they do not advertise. They are better than other car companies because they sell awesome cars. They should let people know about it.
IMO, it's irresponsible not to at least try it. You can do more focused advertising to begin with, maybe target certain areas with expiring local or state rebates, and see if it's cost-effective. If it's not? Bag it. But it probably will be.
People that I know that exist outside of Twitter actually know stunningly little about Teslas or EVs in general. Most people I know do not use Twitter. Places like Twitter or this messageboard are absolutely a bubble.
Also, people tout the Tesla doesn't advertise thing like it's a badge of honor. Nobody gives a *sugar*. The number of people who will NOT buy a Tesla because they saw an ad for it has to be infinitesimally small. Advertising does not have to destroy the "coolness" of the brand. This is missplaced pride to think that Tesla is somehow better than other car companies because they do not advertise. They are better than other car companies because they sell awesome cars. They should let people know about it.
I had no idea a Model 3 was so affordable until I was about to purchase a Honda CR-V hybrid (for $41,000!!) and went on to the Tesla website "just to see". I was blown away to see that the Model 3 was not only about the same price as the CR-V but $10,000 cheaper after state and fed rebates, and would save about $1,300/year in fuel. I am a lifelong 'car guy' but never followed Tesla because I saw them as a specialty product for a niche wealthy urban commuter market.
I don't know what motivated me to check the Tesla site, but I'm so glad I did. Tesla absolutely should get the word out.
I don't know what motivated me to check the Tesla site, but I'm so glad I did. Tesla absolutely should get the word out.
Part of the reason Apple became cool is because of advertising. No one would have heard of the iPod if Apple didn't heavily advertise it with interesting ads
Advertising typically drives around 10%-20% of sales; for automakers this is about 15% - I remember this figure from my previous job in marketing analytics. Imagine if instead of cutting prices Tesla starts a small marketing department.
So instead of cutting say $1k on the price of every car, at a cost of $2B/year on 2M units sold, Tesla spends $200M on global advertising. Nothing fancy. Just literally tell people that it doesn't cost very much to buy a Tesla. I would expect the boost in sales to exceed the impact of the $1k price cut, for 10% of the cost. The $1.8B saving can go into expanding production or whatever else.
So instead of cutting say $1k on the price of every car, at a cost of $2B/year on 2M units sold, Tesla spends $200M on global advertising. Nothing fancy. Just literally tell people that it doesn't cost very much to buy a Tesla. I would expect the boost in sales to exceed the impact of the $1k price cut, for 10% of the cost. The $1.8B saving can go into expanding production or whatever else.
Olle
Active Member
Have you considered that Tesla might be the world's most valuable car manufacturer not in spite of not advertising, but because they are not advertising? If you go back to when you got your first Tesla vehicle, how would advertising have impacted your decision to get one?
EVs are a bit unusual advertising-wise since it's too easy for the average customer to independently figure out that it's nice to skip gas stations, noise and fumes in favor of a quieter and more powerful ride. Said consumer will then notice that there are too few EVs available and that they can't afford them.
Why does EV demand outstrip supply? For those of you who have read "Innovators Dilemma", this is obvious. ICE industry around the globe, ripe for disruption has been holding back the floodgates for 20 years. As the Li-Ion battery slowly scaled up in the 1980s, any businessperson or engineer willing to use a pocket calculator could in 5 minutes figure out the inevitable. By the late 1990s when Li-Ion batteries became a commercial success for computers and phones, it became obvious to most people that BEV was the way to go. Many of us where dumbfounded and disappointed by the that the big auto OEMs were not pursing it. There has been a huge pent up demand ever since and no advertising would have changed that. When Tesla as the first company presented compelling li-ion powered cars, people were poring over them. I remember wanting the Roadster really bad but couldn't afford an extra non family car. When the S came in 2012 it became a no brainer even for me to get one. If Tesla would have had to pay for advertising on top of it fewer had been able to afford the car. When the 3 became available for order, 100s of thousands of people queued night and day to order one. No advertising could improve the amount of 3s delivered.
The main issue was the production cost for a new manufacturer was high, making margins razor thin. Advertising could theoretically have increased demand and thereby price, and maybe margin, but I don't think so. In fact, advertising and a resulting higher price might have hampered Tesla's success since to the overwhelming demand was already present.
If you agreed with non advertising in 2012, you'd wonder at what point in time it would have changed?
IMHO, EVs don't fit the often cited Apple pattern of advertising -> demand. Apple created new products with new markets and new demand. EVs can't do that yet because there is no physical scaling capacity on Earth to satisfy new markets in addition to displacing ICE production, of which there is 850% EV growth remaining until ICE production is displaced.
The fundamental problem with EVs, not only Tesla, but the whole industry, is demand is, for now, insatiable while production cost is high because of inferior scale. Advertising would lead to fewer sales due to higher cost.
The only EV advertising that makes any sense is advertising of future superior or imaginary EVs of ones own brand to steer one's buyers away from present day EVs in case one doesn't have production capacity to fill that demand. This is precisely what the ICE producers are doing.
If Tesla wanted to spend money to generate demand now, there are a lot of low hanging fruits that are probably more in line with the mission. Improved customer service, more superchargers, more destination chargers with Tesla signage are some examples.
In the future once ICE production is mostly displaced and EVs have become a commodity themselves, advertising might pay off.
EVs are a bit unusual advertising-wise since it's too easy for the average customer to independently figure out that it's nice to skip gas stations, noise and fumes in favor of a quieter and more powerful ride. Said consumer will then notice that there are too few EVs available and that they can't afford them.
Why does EV demand outstrip supply? For those of you who have read "Innovators Dilemma", this is obvious. ICE industry around the globe, ripe for disruption has been holding back the floodgates for 20 years. As the Li-Ion battery slowly scaled up in the 1980s, any businessperson or engineer willing to use a pocket calculator could in 5 minutes figure out the inevitable. By the late 1990s when Li-Ion batteries became a commercial success for computers and phones, it became obvious to most people that BEV was the way to go. Many of us where dumbfounded and disappointed by the that the big auto OEMs were not pursing it. There has been a huge pent up demand ever since and no advertising would have changed that. When Tesla as the first company presented compelling li-ion powered cars, people were poring over them. I remember wanting the Roadster really bad but couldn't afford an extra non family car. When the S came in 2012 it became a no brainer even for me to get one. If Tesla would have had to pay for advertising on top of it fewer had been able to afford the car. When the 3 became available for order, 100s of thousands of people queued night and day to order one. No advertising could improve the amount of 3s delivered.
The main issue was the production cost for a new manufacturer was high, making margins razor thin. Advertising could theoretically have increased demand and thereby price, and maybe margin, but I don't think so. In fact, advertising and a resulting higher price might have hampered Tesla's success since to the overwhelming demand was already present.
If you agreed with non advertising in 2012, you'd wonder at what point in time it would have changed?
IMHO, EVs don't fit the often cited Apple pattern of advertising -> demand. Apple created new products with new markets and new demand. EVs can't do that yet because there is no physical scaling capacity on Earth to satisfy new markets in addition to displacing ICE production, of which there is 850% EV growth remaining until ICE production is displaced.
The fundamental problem with EVs, not only Tesla, but the whole industry, is demand is, for now, insatiable while production cost is high because of inferior scale. Advertising would lead to fewer sales due to higher cost.
The only EV advertising that makes any sense is advertising of future superior or imaginary EVs of ones own brand to steer one's buyers away from present day EVs in case one doesn't have production capacity to fill that demand. This is precisely what the ICE producers are doing.
If Tesla wanted to spend money to generate demand now, there are a lot of low hanging fruits that are probably more in line with the mission. Improved customer service, more superchargers, more destination chargers with Tesla signage are some examples.
In the future once ICE production is mostly displaced and EVs have become a commodity themselves, advertising might pay off.
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If the average consumer were as well-informed as you or I was back then, there would not be any need for advertising. Problem is, they're not.
If demand were insatiable, Tesla would not have had to cut prices by that much. As I mentioned above, cutting prices is a very costly way of driving sales. Advertising when done correctly is a very effective demand generator, especially when all Tesla needs to do is squash the common impression that Tesla cars are unaffordable.
Olle
Active Member
You sure about that? Then how come Tesla has been supply constrained for most of its existence, despite making more EVs than anybody else?
How do you define price cuts? IMHO there haven't been any price cuts yet, just a short temporary spike in prices during 2021-22, due to extreme, beyond insatiable demand, where Tesla needed to raise prices to manage the wait times that started to go from months to years.
Prices are now slowly starting to subside toward more reasonable levels, but still way higher than originally intended price level for 3/Y.
For reference, I just specced out my exact configuration Model Y of March 2021 vs the peak Tesla price beginning of January 2023 vs today after the so called "price cuts". As you can see, prices have only come about half way down from the extreme peak. This year's price reduction, twice over, would just bring us back to normal. After that, several month's from now, is when the real price reduction and mega expansion starts. You Ain't seen Nothin' Yet. As said above, the EV industry has 850% left to grow before we can even start getting into some sort of Apple like market expansion. At that point, perhaps a decade from now, there might be some need for advertising.
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In spite of last week's price reductions, Tesla USA inventory is growing. January is was 1600. Yesterday 2106, today 2126. Production is stuffing the pipeline.
I still get asked at highway SuperChargers:
-Where's the gas tank for emergencies?
-How far can you drive?
-How long to recharge?
-Can you drive far?
-What does it cost to charge?
etc.
Tesla could do some Apple or Google Pixel type ads. Cool with a touch of education.
I still get asked at highway SuperChargers:
-Where's the gas tank for emergencies?
-How far can you drive?
-How long to recharge?
-Can you drive far?
-What does it cost to charge?
etc.
Tesla could do some Apple or Google Pixel type ads. Cool with a touch of education.
US Inventory is 2354 now. Still growing. Tesla will need to do something to move cars out of inventory.
My dad is a pretty big Tesla fan. He's on his second or third Tesla. Pretty much everyone in my family drives a Tesla. My dad is also a Tesla investor.
We talk about Tesla all the time. And for the most part the only way he finds out about these price cuts is through me. It is a huge miscalculation to think that at this point word of mouth is going to be sufficient to drive the growth rates we are accustomed to seeing. This was fine for a small fledgling company, but Tesla is now a huge business.
Price cuts can only work if people know about them. You have to get the word out. And if you try to do that solely through things like Twitter and casual conversation, you are going to miss a large percentage of the population. There's at least a chance that not exploring advertising could turn out to be a monumental mistake for the company.
The one thing I will say, though, is that you can at least hope the Cybertruck will serve as a moving Tesla billboard that will get the casuals looking into Tesla enough to find out that they can get a Model 3 or Model Y for much cheaper than they realized. Everyone is going to see a Cybertruck at some point in the next year or so, and they're going to take notice and have a talk about it.
We talk about Tesla all the time. And for the most part the only way he finds out about these price cuts is through me. It is a huge miscalculation to think that at this point word of mouth is going to be sufficient to drive the growth rates we are accustomed to seeing. This was fine for a small fledgling company, but Tesla is now a huge business.
Price cuts can only work if people know about them. You have to get the word out. And if you try to do that solely through things like Twitter and casual conversation, you are going to miss a large percentage of the population. There's at least a chance that not exploring advertising could turn out to be a monumental mistake for the company.
The one thing I will say, though, is that you can at least hope the Cybertruck will serve as a moving Tesla billboard that will get the casuals looking into Tesla enough to find out that they can get a Model 3 or Model Y for much cheaper than they realized. Everyone is going to see a Cybertruck at some point in the next year or so, and they're going to take notice and have a talk about it.
Another anecdote: I like cars and I casually follow new car reviews from places like YouTube or traditional car magazines. I am a very well informed consumer when it comes to cars, but I had no idea the Model 3/Y were so competitive and affordable.
Why? Because auto journalists don’t cover them! why’s that? because they’re not NEW models! look up any review of the model 3 from a mainstream magazine or car reviewer- they’re all from 2018, when the Model 3 was new! And as a result they pick on a lot of the early build quality problems and complain about the $55,000 price tag. As we all know the Model 3 is now a far more competitive product in 2023, as Tesla has dropped prices dramatically, improved quality, and the novelty factor has worn off.
This will hopefully change with the Model 3 refresh, as that will get reviews as a new car. But it just demonstrates that if Tesla is not going to get natural advertising through updating models every 2 years like traditional manufacturers, they have to get the word out through advertising!
Why? Because auto journalists don’t cover them! why’s that? because they’re not NEW models! look up any review of the model 3 from a mainstream magazine or car reviewer- they’re all from 2018, when the Model 3 was new! And as a result they pick on a lot of the early build quality problems and complain about the $55,000 price tag. As we all know the Model 3 is now a far more competitive product in 2023, as Tesla has dropped prices dramatically, improved quality, and the novelty factor has worn off.
This will hopefully change with the Model 3 refresh, as that will get reviews as a new car. But it just demonstrates that if Tesla is not going to get natural advertising through updating models every 2 years like traditional manufacturers, they have to get the word out through advertising!
