Tesla’s Advertisement Cost Is Just $6 Per Car

JUL 12 2016 BY ERIC LOVEDAY 46

Ad-dollars-per-car-sold-from-Global-Equities

Fan-Made Tesla Ad

Fan-Made Tesla Ad

It’s a well-known fact that Tesla Motors has a marketing/advertising budget that’s close to $0, but now a report from Global Equities Research shows us just how little Tesla spends per car on advertising.

While most automakers spends a couple hundred dollars (some several thousand) per car sold on advertising, Tesla spent just $6 per car sold in 2015.

As Teslarati states:

“A new study by Global Equities analysts Trip Chowdhry approximates that Tesla spends even less at $6 per vehicle. In an e-mail to investors this week, Chowdhry said “Tesla power and leverage is unprecedented. $6 of Ad Spent per Vehicle for the product generating more than $8 Billion in revenues and more than $14 Billion in bookings is unheard of in the Industry.”

Of course, Chowdry is a well-know Tesla backer and has continued to raise his target price for Tesla stock, so we should probably take this report with a grain of salt. Maybe it’s not $6, but we do all know that Tesla spend very little on market/advertising and that should help the automaker in the profit department at some point in the future.

Source: Teslarati

Categories: Tesla

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46 Comments on "Tesla’s Advertisement Cost Is Just $6 Per Car"

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I think the rebate program should be included, which should raise it up close to the $1,000 per car level.

Really. You think that nearly 100% of cars Tesla sells are subject to the $1000 referral program?

It’s free money. My guess is it’s around 80%, and then some goes to the referrer.

I personally wouldn’t try to guess at the percentage of referrals. It’s certainly true that we see a lot of posts all over the Internet about how many Tesla owners are eager to talk up Tesla, and we even see referral number given in some posts.

But Tesla has a very high profile on the Internet, so there is a lot of exposure that isn’t from personal testimonials.

It wouldn’t at all surprise me if the referral rate was significantly lower than 50%. But still, you have a good point Ambulator; it seems that $6-per-car figure doesn’t include referral fees, and by rights it certainly should.

FWIW, Tesla’s spam mails do explicitly remind me there’s a big rebate to be had by simply “getting a referral code from any Tesla owner”.

So whatever the percentage, Tesla is using it as any other meaningless rebate because we humans are stupid like that and would rather buy a product priced at (X+2) with a “rebate” of 2 than if the product was originally simply priced at X…

I bet it’s still more than GM spends on the Volt!

+1

I walk around with a Model 3 emblem on my hat and people don’t have a clue what it means. How about Tesla work with Major League Baseball. Before some of the home games for the Arizona Diamondbacks, their mascot “Baxter” rides around the outfield in some type of vehicle. Imagine if the local TESLA showroom provided an S or X to the Dbacks to drive their mascot around the ballpark before the game. People might actually see the Tesla and ask, “What is that?” People need to see the damn cars!!!! If Tesla isn’t going to advertise, then they need to let people see their product. My two cents worth.

True – they are beyond the early-adopter stage…they are slowly breaking into the mainstream. I know a lot of people that at least have heard of Tesla, and a substantial majority of those view the brand in a positive light. I have seen more and more Ses around these last few months.

I’m sure that the end of the value guarantee program and the reservations of the Model 3 are going to drive down used S prices dramatically over the next year.

They advertise very heavily in Facebook and Tweeter. I don’t think is is just $6 per car. Besides they run Tesla stores in very expensive retail locations, which is basically a marketing cost.

I’ve NEVER seen one. And I’ve followed Tesla since the Roadster existed only on paper.

Elon’s tweets aren’t paid for.

Depending on where you live, then you most certainly have never seen one. There are currently two in all of the affluent Northern Virginia area of the DC region (on the second floor of the Tyson’s Corner shopping mall, and another in a shopping center in the Woodbridge area).

There is one on 10th and K Street in DC itself, on the retail level of an office building. That was the first one in the entire metropolitan region.

You’ll have to check Tesla’s website to see the locations of stores, service centers, superchargers and destination chargers.

Launch events, test drive events and world-wide exhibitions are the big cost drivers.

We would be better off in a world with less advertising and more reliable word-of-mouth consumer experiences. I’ve been told that a study was done of the effects of McDonald’s ads. The result was not that people wanted to eat McDonald’s, but they wanted to just eat hamburgers. But then that’s also true of Burger King ads and Wendy’s ads. All the oligopolists selling mass goods are in fact advertising for each other, working together to indoctrinate the public endlessly to consume some particular thing that they may not really need. That’s why you got the SUV craze and the tailfin craze; all the car companies between them trained the public to want a useless thing.

Take that away, and consumers might have to educate themselves, though I admit I’m skeptical that they will.

Well, with services like Angie’s List and Yelp, the internet is turning things around a bit. Many people rely on those things.

lol, I like how that dudes grabbing his chicks ass….

There’s something about kick-ass EV that drive people crazy. Just look at those who held “funeral” for EV1, or that completely insane guy who blogs about SparkEV! There’s hardly any need to spend money on advertising with kick-ass product when the owners will do it for free.

Hmmm, no… Keef Leech (aka Keef Wivaneff) is completely insane. Sparky is just a bit fanatic about his Spark EV. 😀

That guy might have money motive (ie, short selling). But for fans who make videos and blogs, there’s no money, purely driven to madness (love=madness). As the old Ikea lamp commercial put it, having feelings for inanimate object is just crazy.

IKEA lamp commercial:

” completely insane guy who blogs about SparkEV! ”
Thankfully there’s only one so we don’t mind so much.
I’ve never saw a Tesla commercial, billboard, or heard a radio spot. If you didn’t go to their website, you wouldn’t even know they exist. That is except for the news constantly slamming them.

Stores, superchargers (might not be part of advertising, but people drive by and see them). They also sell merchandise, like hats and Tshirts.

Not sure what else it might be.

I am not doubting the data or quality of Tesla. But I will comment on a direct observation of Tesla and SpaceX. They ride the free advertising and fan base in ways that are near shameful. What am I talking about? When it comes to philanthropy, true community members donate real time and dollars to better the communities (more than token gestures) but dollars that can build programs and improve the future work force and again community.

Myself and other nonprofits have tried and wasted valuable time and dollars ask Musks PR machine makes it look like their companies are the second coming. They are not, In many ways their lack of true community engagement shows they are just much better at working PR, such can be seen in the wonderful fan based advertising they get, while the communities they operate in, get maybe pennies for educational programming / support that the local school systems are resource strapped for. Its time to give back Elon, especially if you want an educated prepared future work force.

I don’t agree with the premise of this argument nor the shaming aspect of it.

And who should care about THAT? Stating that you disagree without giving any reasons makes you look, frankly, pitiful. As if the rest of us should now look differently upon the post, now we know that you disagree!

Give back what? Tesla took nothing, there’s nothing for Elon/Tesla to give back. If he wants to give the fruit of his hard work, which he must do eventually (ie, death), that’s giving (not giving back) and whoever receive that should be thankful. Demanding that he give up fruit of his labor is just wrong.

The only entity that can “give back” is the government, which exist to rob money from everyone. No one pays tax voluntarily, but under threat of kidnap and death. If you really want something given back, go bitch at your politician to give up his fortune; most likely, his money is made through corruption that paid millions of campaign contributions to get him elected.

Yes, the government exists solely to rob poor SparkEV, because providing for the common good is pure evil, and common welfare (oooh, dirty word there) certainly is not the very taproot of civilized society. #sarcasm Any profit making entity can “give back” any portion of the profits earned and retained, and many do. Some are founded with the culture to give back from day one, and those companies should, as their commitment is already known to their investors, and therefore priced into the equity. Others choose to give back once they are in a financially stable enough position to do so, like just about every large corporation in the Fortune 500, for example. But it is far too early to suggest that Tesla has any obligation to give anything at all at this point, especially when considering that their entire mission of electrifying transportation would already be a great boon to society. That, combined with their still uncertain future, would make any significant charity effort a net negative effort, in my opinion. The US government itself doesn’t really give back in my view because their entire mission is to provide goods and services to the whole nation in exchange for… Read more »

You can only give back what you took. If you think all those giving are “giving back”, why don’t you tell them not to take in the first place so you don’t have to go through take-giveback game? There’s no obligation for anyone or any company who made money legally to give, and certainly not “give back”.

There’s only one entity legally allowed to take, and that’s the government. If you think they’re spending 4 trillion dollars that they took from you and me under threat of jail to provide good of the people, you need to wake up and smell the bombs and bullets. Here’s another “common good”: US prisons more portion of its populace than any other country on earth.

If you don’t like the government and what it’s doing, get involved or run for office. You’re in charge as much as you can convince the population that you should be in charge. Don’t act like it’s some unreachable other. That’s appropriate for dictators and monarchs.

Our government is, after all, “we the people” organized to serve “we the people”, and it’s limits are defined by “we the people” every time there’s an election.

We jail such a large portion of the population only because we’ve voted for leaders who support or allow that, or failed to oppose those leaders vigorously enough in prior elections.

To hate the US government is, in part, to hate yourself.

Our government is, after all, “we the people” organized to serve “we the people”, and it’s limits are defined by “we the people” every time there’s an election. — Michael

Personally I have ran for office I didn’t win but I wasn’t expecting to win I just didn’t want the person to win by default.

You can thank your precious “small gov’t” politicians for all of that – unpaid wars, the geniuses behind “no-bid” gov’t contracting practices…not to mention the bloated contracts to privately-run, for-profit prisons… We have the highest incarceration rate because the inviolable GOP made incarceration a profit-driven enterprise decades ago, all under the guise of making gov’t smaller. Sure, there were fewer gov’t-run prisons after the privatization, but overall, there are a bunch more prisons, with all the financial incentive in the world to keep them full. WBush didn’t raise taxes to pay for Medicare Part D, either – the expansion was a good idea, but not paying for it isn’t exactly “fiscally conservative”. Would you rather have a group of people that “tax and spend” (Dems), or a group of people that just “spend” (GOP)? When you elect people who badmouth gov’t and supposedly don’t believe in gov’t into gov’t positions, then these are the crimes against humanity that you can expect (GOP). If you want to see a gov’t run responsibly and efficiently, then you need to elect people who recognize the fact that gov’t isn’t inherently flawed and who are dedicated to making it work and to make sure… Read more »

I don’t agree I think there’s tremendous value in the fact that his company Tesla in particular was first to really Market a compelling electric vehicle that helps us reduce our dependence on oil sources and is cleaning the air for all of us by reducing the emissions of the same. This could potentially have an impact not only at the community level but perhaps even the national level maybe even global I just think his vision is probably a little bigger than you can get your brain wrapped around.

Your jealousy of Tesla’s success is showing. It’s showing a lot.

Tesla Motors has the goal of ending the burning of fossil fuels for transportation. That’s one of the most worthy goals of any organization in the entire world, including whatever charities you happen to work with. The fact that Tesla is making money while doing so doesn’t alter that in the slightest.

Instead of being jealous of Tesla, perhaps you and the charities you work for should study the way Tesla inspires excitement and demand for its products. Charities could do better by imitating what Tesla does.

Space Geek-

If “community reinvestment” is your code for selling cars through dealerships, you can forget it.

Oh, oh, oh – good eye! Yes, one of the huge arguments that NADA keeps making is that dealerships spend so much money in their local communities…sponsoring teams in little leagues, etc.

That could be it. Maybe the guy is/works for a dealership that would actually like to sell EVs…or just is more clever than usual in propaganda…

How about wait until Tesla is actually profitable.

$6 . . . LOL.

The cars sell themselves.

+1

As mentioned above, Tesla’s retail store costs must be substantial and that is pure advertising. Renting space in high end malls across the country is not cheap – and those stores alone only sell apparel accessories. In store sales alone do not generate much revenue.

I own two Teslas actually and I think the spending little on advertising notion is a myth.

shrink said:

“Tesla’s retail store costs must be substantial and that is pure advertising.”

No, that’s sales, not advertising. I’m sure that Tesla’s accountants are capable of distinguishing between the two kinds of expenses, even if you and agzand are not.

Unveiles are advertisement.
Superchargers are advertisement.
Stores are advertisement.
$1000 referrals are advertisement.
Tesla employees hitting forum, YouTube, Facebook, Insideevs, etc… are advertisement.

Regardless of the validity of your concerns…

…I would like to know where these items fall in terms of accounting – the stores might be able to be accounted for in any number of ways…and any that are also service centers might be lumped under operating costs. Superchargers are another service being offered, and therefore the building and operating costs could be accounted for under other categories.

Even though the store presence, the supercharger signs identifying their location, etc., do serve an advertising purpose, that doesn’t mean that they are accounted as such on the books (legally).

we would never touch dirty fuelled Jaguars or Range Rovers,although they are still the real Status symbol of wealthy neighbourhoods!!!

Another Euro point of view

Actually I saw today for the first time in my life a (small) Tesla advertise billboard here in Geneva, I will take a picture if I do not forget this afternoon and post it here as this is history to me (I don’t remember having seen any “traditional” advertising made by Tesla before).

Where is Tesla spending any money on advertising? Elon Musk’s Twitter account?

Great question!