The famous electric car maker has never spent money on advertising
One of Tesla’s stakeholders suggested that the company should start spending money on advertising for the first time ever. The investors are going to vote on the proposal in mid-July, during Tesla’s annual meeting, Business Insider reports.
James Danforth, who holds 850 Tesla shares, believes Tesla has to spend on advertising “at least $50 per car produced”. According to Danforth, Tesla should increase brand and product awareness – especially after the company announced it was closing its retail stores and focusing on selling its products online.
Danforth also says that advertising would help dilute substantial FUD (“Fear, Uncertainty, Doubt”) and fight misinformation that’s often spread by the competitors.
Tesla’s board doesn’t support the proposal, and its members are urging stakeholders to turn it down. Directors say that it “is based on an apparent misunderstanding of Tesla’s retail operations”. Also, they think awards and recognition drive enough publicity to the company.
Even Elon Musk believes that Tesla doesn’t need advertising yet since the demand is now outpacing production. In October 2019, he said that at some point, the company will do advertising. However, Tesla’s ads will just inform the audience about the product and “not engage in the typical trickery that is commonplace in advertising.”
According to Business Insider, Tesla is doing fine even without advertising – the electric car maker is worth more than Ford, General Motors, Fiat-Chrysler, and Daimler combined.