Tesla Retail Investors Start Advertising on Behalf of EV Maker, Here are the First Commercials

Tesla is famous in the automotive world for not running any paid ads. Elon Musk has even in the past compared having celebrities endorse his products to basically lying. This strategy makes Tesla an outlier in the heavy advertisement dependant automotive world.

Legacy automakers are actually so dependent on advertisements that they budget billions of dollars annually to run ads. This comes out to hundreds to thousands of dollars per vehicle. Musk believes it’s better to use this money to make the products better and have the products basically sell themselves.

When Tesla was a small upstart, barely able to make tens of thousands of vehicles, this approach worked flawlessly. The demand for Tesla vehicles was through the roof and the EV maker struggled for many years to increase production to match this demand.

However, Tesla is now in a completely different position as a company. Currently, the EV maker has 4 factories on 3 continents. The initial 2 factories, the Fremont, California plant and Giga Shanghai are now running full throttle with installed annual production capacity of 750,000 and 1 million vehicles, respectively.

Related News: Tesla Model Y Jumps 22 Spots to Become the Best-Selling Vehicle in Europe for Q1 2023

Tesla is also ramping up 2 of its new factories, Giga Texas and Giga Berlin. These 2 factories, only a year since the first vehicle rolled out the production line, have reached a production run rate of 200,000 and 250,000 Model Y’s a year, respectively.

With all this new production capacity, Tesla last year grew vehicle deliveries to 1.34 million vehicles and this year Tesla has guided for 1.8 million deliveries with Elon Musk hinting that they have the capacity to reach 2 million vehicles.

This is all impressive, however, with this rapid increase in production capacity, Tesla might have become a victim of its own success. Once an EV maker with a 9-month waiting list to purchase a Tesla vehicle, now the EV maker operates with ample excess vehicles in its inventory and has been forced to cut prices to drum up demand.

Since the start of this year, Tesla has instituted several price cuts on the company’s entire vehicle lineup and in all geographic regions. These price cuts added together have decreased the price of Tesla’s vehicles by as much as 25% in just 4 months.

Tesla also recently posted financial results for the first quarter of this year. This is the first earnings report Tesla published since the price cuts and it showed the effects the price cuts are having on the company's financials.

Tesla’s vehicle gross margin went down to 19.6% and the company's operating gross margins fell to 11%. And these results have started a bit of a controversy in the Tesla community, with several prominent Tesla YouTubers, Investors, and Twitter personalities arguing whether Tesla should advertise or cut prices to drum up demand.

These arguments have actually been so dogmatic that they have caused a bit of a rift in the Tesla community. However, now, Sawyer Marritt, who’s a Tesla investor and Twitter news source for everything Tesla related has made the first effort to bring the two sides together by producing his own Tesla ad on behalf of the company.

In the advertisement, Sawyer Merritt compares the price of the Model Y AWD ($39,500 after the $7,500 federal EV tax incentive), which is the cheapest version of the Model Y sold in the US, to other electric and internal combustion crossovers.

In the first half of the ad, Sawyer shows the Model Y AWD, after the $7,500 federal EV tax incentive has a cost similar to other popular mainstream crossovers such as the Honda CR-V, Ford Escape, and Toyota RAV4.

I don't think most people realize how good of a deal the @Tesla Model Y AWD is now, so I made a brief video: pic.twitter.com/LS0zvur5pb— Sawyer Merritt (@SawyerMerritt) April 27, 2023

And in the second half of the ad, Sawyer highlights the fact that the Model Y AWD costs less than more premium crossovers like the Ford Mustang Mach-E, BMW X3, Audi Q5, and Mercedes GLB.

Finally, Sawyer finishes the ad by highlighting the fact that the lifetime running cost of EVs is lower than that of internal combustion vehicles; the fact that the Model Y has been declared the safest vehicle on the road by various testing agencies; and that the Model Y is the most American built vehicle on US roads.

In our opinion, this is a great ad and highlights several key distinguishing factors for Model Y in a succinct manner. It’s also in line with Elon Musk’s principle that if Tesla were to advertise it would be to educate consumers on the features of the company’s vehicles.

As of writing, the ad has received over 57,000 views. But, without paying to increase its reach, it's not exactly clear how many individuals who are unfamiliar with Tesla it will be able to reach.

Having said that, we will keep you posted on the various grassroots attempts made to promote Tesla products and we will also be sure to keep you posted on Tesla’s expansion and demand for the company’s vehicles.

Until then, make sure to visit our site torquenews.com/Tesla regularly for the latest updates.

So what do you think? Excited to see the first ads produced by the Tesla community? Also, do you think Tesla should start paying for ads? Let me know your thoughts in the comments below.

Image: Screenshot from Sawyer Merritt’s Tesla ad

For more information check out: Joe Rogan Calls Bill Gates’ Tesla Short Position “Terrible Choice” After Test Driving Cybertruck in Giga Texas

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.