Will the company have to resort to traditional advertising?
Tesla sales numbers in Europe have inspired Matthias Schmidt to ask if Tesla is now being disrupted by the same legacy automakers it once disrupted with its electric cars. Now that some of these companies are finally convinced that EVs are the way to go, they are selling more of them in the Old Continent than the American company. Why? According to Eilis, from Electroheads, it could be due to Tesla’s marketing department – if there was one.
Eilis argues in this video that Tesla has always relied on a word-of-mouth sales strategy that worked pretty well until very recently. And it worked because anyone who wanted to buy an electric car with a decent range had no option but to buy a Tesla. With more options in the market, Tesla may have to start convincing customers it is a nice pick.
That’s obviously not the case for what Eilis calls “the Tesla fandom.” They are all-in, regardless of what the company offers, so much so that Eilis states Tesla is more like a cult than a modern enterprise. She even points out in the video the elements that allow her to make such a remark.
Apart from these guys, everybody else needs convincing. Tesla's issues with built quality, reliability, and servicing do not help. On the contrary: when a company relies solely on word of mouth to sell, it needs to be almost perfect so that its customers will keep on recommending it to everyone. Sandy Munro warned about that in a recent 2021 Tesla Model 3 teardown video.
If Tesla is unwilling to advertise, it will have to find other ways to make its products appealing to a broader public than the one it already takes for granted. Reducing prices is a limited strategy that can affect not only its profit margins but also owners of its vehicles that will see depreciation increase.
Eilis ends the video by asking what Tesla should do to remain competitive in such an environment. Regardless of what you think it should be, it is clear Tesla is at an inflection point: either it solves the problems about which customers now complain to keep them recommending its vehicles, or it adopts a new marketing strategy, such as advertisement. It has worked for legacy automakers for decades, independently of what they decide to sell – and now they want to sell EVs.