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Monday, June 7, 2021

Product Over Advertising - How Tesla Is Different #78

Tesla does not do things the way that other automakers do things. Whether it's how they recruit talent, create mega castings, or eschewing lidar and insisting that full self-driving can (in fact must) be done via camera alone, citing lidar and (more recently) radar as a crutch to camera vision that leads to a local maximum from whence the 100% goal cannot be achieved, Tesla does things their own way.

Elon Musk's appearance on Saturday Night Live is yet another example of this unique path. Commercials for the Audi E-tron, Ford Mustang Mach-E, Volkswagen ID.4, and Lucid Air all aired within the first 30 minutes of Musk's SNL episode. Lucid Motors even used the air time to debut their first ad for the Lucid Air with 500 miles of range, due later this year.

While the other automakers are paying for this air time, paying ad agencies to make the commercials, and paying marketing companies to craft their message, their executives review and refine ad pitches, Musk is doing none of this. 

The minimum SAG scale is currently $3,488 per week. NBC would be required to pay Musk at least this much for his time preparing, rehearsing, and shooting that week. So while other automakers were paying NBC for ad space, Musk was getting paid (albeit an insignificant amount for a billionaire). Whatever impression a 30-second ad spot had on the audience (if they even saw it) was far outweighed by Musk's air-time in front of the audience. 

Other car companies are paying for ads. Tesla is making a compelling product.

Musk has been asked many times why Tesla does not spend money on PR and ads. In the Q1 2021 financial update, one of the SAY investor questions asked why Tesla didn't hire a PR staff to fight the FUD. The answer was that the truth will come out, and that time, money, effort... would all be better spent making a better, more compelling, product, rather than “trying to trick people” with perfectly crafted messages.

In 2018, Musk said, “At Tesla, the thing we focus on is we put all the money and attention into trying to make the product as compelling as possible because I think that the way to sell any product is through word of mouth. The key is to have a product that people love.” – Elon Musk

Tesla is an engineering company first and foremost.

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