During the Q&A portion of the Tesla Shareholder meeting on 16th May 2023, the suggestion was once again raised that Tesla should consider advertising to the mainstream public. The surprise was that this time, contrary to all previous responses, Elon agreed apparently in that moment to trial it for the company to explore the potential.

To rapturous applause

This is a hugely important decision and to Musk's confusion, the audience's reaction spoke volumes as cheers filled the room with celebration.

It makes perfect sense, the company’s social accounts on Twitter and YouTube put out some excellent, informative content, but the majority of followers are either already Tesla owners, or at least enthusiasts. It creates quite an echo chamber that seems so clear and widespread that you expect everyone to have some idea about the company and their products. The truth, however, is as Elon eloquently put it;

Exactly right, all Tesla drivers and almost anyone who's had the opportunity to try one understand that the 'hype' is not only justified, but undersold. There are so many advantages and great features of these vehicles that most of the population are unaware of, still being fed the same doubt by the mainstream media about EVs in general. We do our best to spread the word, for example to illustrate the fact that total cost of ownership of a Model 3 is almost equivalent to a Toyota Corolla! It's been so well buried that the roots have travelled far before bursting to the surface, now Tesla are joining the fight against FUD.

Past the point of no return

Just this month the announcement was made that the Model Y was the best selling vehicle in the world in Q1 2023, not just in the world of electric, but all cars. How can this be the case? Perhaps it's finally come to a significantly large enough group's attention that they are in fact the safest, most performant, reliable, entertaining, and easiest to use and own cars on the planet. Yes that might be the case.

Regardless the reason, the numbers don't lie and they're only getting started, prepare to see this retain it's position for some time to come.

This is the explosion of the age of EV, we've reached the point where early-adoption is far in the rear-view mirror, this is the time of mass uptake, the flood gates have opened and people are voting with their money - which corporations have begrudgingly acknowledged.

We've reached this point, a fleet of over 4 million vehicles and annual production run-rate of almost 1.8 million estimated for 2023, without a single penny being spent on Tesla advertising. There's been little motivation to do so being supply constrained already, and they’d likely struggle even now to find a willing sponsor with so many advertisers already locked into contracts with the other manufacturers like Ford, GM and VW, who would not wish to spare their space with a competitor.

This is a truly impressive achievement, Ford’s 2022 marketing budget was $2.2 billion, imagine having all that money available to instead re-invest in research and development, improve processes, or simply pay off debt. Another incredible fact being that Tesla have no debt in a time when the US government itself is on the brink of financial collapse having reached Trillions of dollars in debit ceiling. This infant technology company is now entirely self-funded and consistently growing.

What will happen to demand?

So once these adverts start rolling onto (likely social media) outlets and visibility of the company, their achievements, and most importantly their products increases, what kind of change are we expecting to see in terms of popularity and demand?

There's still a huge proportion of individuals who either don't know what a Tesla is, or have heard enough bad things about them to believe they're a problem, or worse, not part of the solution. It’s a shame so many are still unaware, I'd be interested to know the percentage of people who have driven, but do not end up purchasing a Tesla as I think it would be tiny compared to all other auto-makers, and also can't help consider how many things I'm blissfully oblivious to that others consider essential to life… Anyway, there isn’t any other logical course to follow, Tesla will continue to innovate and amaze, and ever more people will hear the call.

The limiting factor has always been supply, even now with two additional factories coming online in the last year it's still not possible to buy a brand-new (non inventory) car and have it delivered the same day... unless you're the King perhaps, who knows? So even to this day there are more people ordering cars every day than Tesla can immediately deliver, which is impressive considering the size of the existing fleet coupled with the number produced growing daily.

A match made in heaven?

The irony of the situation being that Elon Musk now owns Twitter which is heavily dependent on advertising, whether Tesla decide to utilise this easily accessible platform instead of some of the more commonplace mainstream outlets is still uncertain, but it definitely provides a direct avenue with guaranteed lack of opposition if necessary.

The media material required is also readily available since over the last few months there have been a slew of feature highlight videos or information tweets just itching to be sold into advertising space. Their teams are already creating excellent short films to illustrate the benefits and fun aspects of Tesla ownership, there's no shortage of doubt to dispel and these bite-size snippets are already a great way to propagate the news into the general population.

Whilst I look forward to seeing the adverts themselves as well as their channel of choice, I'm much more excited by the impact it will have on their overall exposure and subsequent demand figures. Already being in the winning position of global market share majority, having the power to influence demand and level out sales to keep waiting times acceptable is essential to maintaining smooth, rapid growth. It would be great if they were able to pump out 20 million cars next year, but we'll just have to wait a few more yet (before the end of the decade at this rate).

Advertising, as underpins the majority of capitalism, is a powerful tool to generate additional interest when needed, but in this instance it will likely show a much more pronounced effect. Similar to the launch of the iPhone when smartphones inevitably replaced all before, once people realise that EVs are not only the best cars, but also relatively affordable, there's no switching back to I.C.E. The knock-on effect from adverts combined with the easiest test drive experience is the word-of-mouth that Tesla relied upon initially, that people can't wait to tell their friends once they've tried these incredible cars, and with a new height of mainstream reach it seems that, as is typical for them, the resultant effects could be exponential.

The Cybertruck launch event is just around the corner…