By an unexpected turn of events, Teslaelectric vehicle company led by Elon Musk, announced that it would launch advertising campaigns for the first time in its history. The news was revealed during the company’s annual shareholder meeting held in Austin, Texas last Tuesday (16).

In response to the shareholder, Musk stated:Let’s try some ads and see how it works.“.”Twitter is heavily dependent on ads so I’m here, I’ve never used real ads before and now I have a very ad dependent company. So I think I have to say that advertising is great, everyone should do it!“, he concluded.

The crowd in attendance showed an extremely positive reaction to Musk’s decision to invest in advertising, even exceeding expectations generated by the CEO’s promises such as two new product launches scheduled for next year and his intention to remain Tesla’s CEO next year. near future.

This shift represents the exact opposite of the views of Musk and Tesla. For years, the billionaire CEO has declared that there is no need for advertising, arguing that demand for the company’s vehicles always exceeds supply. In a 2019 tweet, Musk stated, “Tesla does not advertise or pay for support. Instead, we use that money to make the product great.”

In an interview given to CNBC after the meeting, Musk said that the decision to invest in advertising was not previously planned and only came about when he was asked about it at a shareholder meeting.

Competition is key

One reason for this repositioning is the growing competition that Tesla is facing. Traditional automakers have invested heavily in advertising electric vehicles, even those not yet on the market. This increased competition, combined with rising interest rates, has led Tesla to roll out a series of price cuts this year. This price cut has hurt the company’s bottom line, although it is still more profitable than traditional automakers.

Another factor that may have influenced Musk’s shift in advertising was the acquisition of Twitter. Prior to Musk’s purchase, more than 90% of Twitter’s revenue came from ads. However, the platform has since faced advertiser exits.

“The irony is that Twitter is heavily dependent on advertising.“, Musk commented, referring to his previous views on the topic and the challenge he now faces to bring advertisers back to Twitter. After this statement, Musk and the audience present burst out laughing.

Musk’s decision to invest in advertising represents Tesla’s new strategic approach to fighting the fierce competition in the electric vehicle industry and reaching out to a wider audience. Now it remains to be seen how the company will use this new communication tool to promote its products and expand its market presence.

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Via: The Verge Source: CNBC

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