One of the beautiful things about Tesla in its early days was it challenged all aspects of the auto industry. It wasn’t just challenging the industry to transition from internal-combustion engines to electric vehicles. Tesla also challenged the way cars were sold. While car ads flood our airways, you’ve never seen or heard an ad for Tesla. While car makers are constantly making new models, Tesla stuck with four: Model S, Model X, Model Y and Model 3. And while cars were traditionally sold at dealerships, Tesla’s were sold online and via showrooms (this even required the challenging of some US state laws that required cars to be sold via dealerships).
As Tesla sales slow and competition heats up, Elon Musk has changed his stance and suggested the car company might try advertising. This is in the context of slowing sales growth (still growing, just not as quickly) and increased competition. In January, Tesla cut prices of their cars more than 20% but only saw a 3.2% quarter-on-quarter increase in sales. Elon seems to think traditional advertising might help change that.
This article takes a look at Tesla’s financials and considers what they would look like if Tesla spend a similar amount on advertising as its carmaker rivals.
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