In a surprising turn of events, Tesla’s CEO, Elon Musk, announced during Tesla’s annual shareholder meeting on Tuesday, May 16, 2023, the company’s decision to try conventional advertising after years of being steadfastly against traditional advertising methods. This momentous decision comes at a time when the ocean of electric vehicle competition is losing its distinctive blue color. With increased competition in the electric vehicle market, Tesla’s move towards conventional advertising is making headlines worldwide (CNN Business).
For years, Elon Musk has been an ardent advocate against traditional advertising, focusing instead on disruptive marketing strategies to propel Tesla’s success. Despite the industry’s norms, Musk has emphasized the power of word-of-mouth marketing, exceptional product quality, and technological innovation as the pillars of Tesla’s growth.”
I do not believe Tesla will engage in a traditional advertising campaign. Word of mouth is the most effective and trusted way of convincing people to buy electric cars.” Elon responded to a tweet in May 2018 suggesting that Tesla should consider advertising.
Despite Elon Musk’s longstanding aversion to conventional advertising, Tesla’s decision to embrace it signals a significant shift. The once-blue ocean, where Tesla once thrived, is now crowded with established automakers and emerging startups vying for a piece of the EV market share. With increasing competition, the distinctiveness that once set Tesla apart is slowly fading away. To adapt to this changing landscape, Tesla is considering a move towards conventional advertising as a strategic response.
Tesla’s unconventional advertising strategy thrives on the foundation of its exceptional product quality. Tesla’s success has been driven by passionate early customers who have become advocates for the brand, resulting in powerful word-of-mouth marketing.
China’s BYD, which entered the automotive industry in 2003, emerged as the front-runner in electric vehicle sales in 2022, achieving remarkable success with a staggering 1.86 million electric cars sold. In comparison, Tesla trailed behind by a distant second, delivering 439,770 locally made vehicles to customers in China. BYD’s impressive sales figures highlight the fierce competition within the electric vehicle market, particularly in China, which has become the world’s largest EV market in recent years (Rest of the world).
However, it is important to note that Tesla’s market value has experienced a significant decline of over 50% since April last year. This downturn has been attributed in part to Elon Musk’s acquisition of Twitter, as he devoted more time to running Twitter while potentially allocating less time to Tesla.
Twitter has reportedly lost tens of millions of dollars in advertising in the seven months since Musk bought the platform, and he appointed a new CEO, Linda Yaccarino, last week with the task of turning around the social media platform’s advertising woes.
While the specifics of this new shift remain unclear, Musk said in a follow-up interview with CNBC that if advertising is informative and entertaining, “it can start to approach content,” while also acknowledging the potential to utilize advertising as a platform to showcase lesser-known features of Tesla vehicles.
As the ocean of electric vehicle competition loses its distinctive blue color, Tesla’s potential shift towards conventional advertising indicates a strategic move to revive its blue ocean strategy. Elon Musk’s contemplation of traditional marketing methods underscores the evolving nature of the electric vehicle market and the need for Tesla to adapt to the changing tides.
By embracing conventional advertising, Tesla aims to reclaim its distinctiveness, attract new customers, and maintain its position as a leader in the rapidly expanding EV industry. The success of this new approach will be closely watched as Tesla strives to reshape the blue ocean and remain at the forefront of sustainable transportation.
Brand marketing is often overlooked until competitors enter the market and start competing for the same customers. When you are the only or major player, investing in brand marketing may seem unimportant because the market has few options to choose from. However, once the market becomes crowded with options, the need for differentiation and positioning becomes more obvious. Therefore, it is crucial to invest in brand marketing to stand out from the competition and dominate the market.
Edited by: Deborah Wagor