The electric car manufacturer Tesla traditionally refrains from advertising, but CEO Elon Musk now wants to break with this line. "We're going to try a little bit of advertising and see how it goes," Musk said Tuesday at Tesla's shareholder meeting in Austin, Texas. In view of high demand, Tesla did not need paid ads for a long time. Musk used his own popularity and other means as marketing tools – especially the online platform Twitter, which he has since acquired. But this seems to be increasingly exhausted. This year, Tesla lowered prices several times.
However, Tesla does not yet have a mature plan for advertising, Musk told CNBC after the Annual General Meeting. "I just agreed to this, there is no complete strategy yet." However, paid ads could be a way to expand Tesla's customer base. The e-car pioneer is pursuing ambitious growth targets, but the competition is becoming increasingly fierce. In addition, there is a threat of economic headwinds.
Tesla is also not "immune" to recession risks, Musk said. He expects a difficult economic environment in the next twelve months. In April, Musk had said Tesla would prioritize revenue growth over earnings after the company missed its margin target due to aggressive price cuts.
Distracted by Twitter
Investor concerns also revolved around the lack of succession planning for the CEO, falling demand and his exposure to Twitter, which he bought in October. "There was a short-term distraction because I had to do major open-heart surgery at Twitter to ensure the survival of the company," Musk explained. Last week, he announced that former NBC Universal advertising chief Linda Yaccarino would succeed him as Twitter CEO and focus on products and technology.
Tesla shareholders swiftly voted in favor of the board's recommendations on almost all proposals on Tuesday. The company's shares rose 0.6 percent in after-hours trading. The stock is down about 2021 percent from its record high in November 60, driven by Musk's distraction from Twitter and concerns about waning demand for electric cars.