Tesla CEO Elon Musk has long resisted paid ads. He’s always been explicit in his stance that Tesla won’t advertise or pay for endorsements, and that the money from the company is best used to make quality products that people enjoy.
For Musk, like most people in the Tesla community, “trickery” is synonymous with paid ads and does not really reflect the nature or value of the products. This attitude is valid because the object of advertising is not to tell you the whole truth about the product, but induce in you the urge to purchase.
Instead, Tesla has excelled in word-of -mouth marketing. This, of course, is largely because of exceptional products, happy owners and a welcoming community. Moreover, celebrities and influencers help a company develop without being paid for it. They just buy, use, enjoy Tesla cars and share their experiences with others. Tesla is also getting free ads from SpaceX, another Musk company.
Among all automakers, Tesla is the only such exception. The data provided by Statista on advertisement spending per sold vehicle shows the five biggest and the five smallest advertisers among automotive brands in the United States in 2019.
Genesis (Hyundai Motors) spends $2.057 per vehicle on ads according to this report. That is, all of this company’s cars are at least $2,057 more costly for the customer. Or, at least, the number reflects money that hasn’t made the car any better.
Also, Lincoln (Ford Motors) spends no less than Genesis $1,911 per sold car. Jaguar (Tata Motors) spends $1,542 per publicity car.
Tesla’s spends exactly $0 on ads!
The reality is buyers of any car other than Tesla would pay more than their real value because of the advertisement costs. Advertising expenses and dealer fees require consumers to incur extra costs which are not directly related to the vehicle’s quality and performance.
Tesla’s business model and lack of paid ads was mainly targeted at purchasers. The money saved by the company is aimed at developing and producing high-quality products that will vary qualitatively from those of other manufacturers, and will therefore be sold at a comparatively low cost. That is why every dollar spent on Tesla cars is worth it.
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