Elon Musk says Tesla will try out advertising for the first time in a major shift for the automaker

Elon Musk Tesla
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  • Elon Musk said during a shareholder meeting that Tesla will "try out" advertising for the first time.

  • The billionaire has been averse to advertising in the past.

  • Musk's announcement was greeted by cheers from investors at the event.

Elon Musk said Tesla will begin advertising for the first time in its history.

"We'll try out a little advertising and see how it goes," Musk said, during Tesla's 2023 Cyber Roundup at its Austin facility.

Musk said the company would begin advertising its products after a shareholder at the event, Kevin Paffrath (also known as the YouTuber Meet Kevin), suggested that the company needs to do more to let non-Tesla fans know about the company's products.

"I hear you," the Tesla CEO said, adding that it's "ironic" that Twitter is "highly dependent on advertising."

In 2022, Twitter generated about 90% of its revenue through advertisers. Though, the platform has reportedly had some advertisers flee since Musk's takeover.

Musk's announcement at the Tesla event was met with cheers from the crowd at the event. The billionaire later told CNBC's David Faber on Tuesday night that he was surprised by the enthusiasm. He told CNBC Tesla would use ads to combat misconceptions about the brand, especially when it comes to pricing and promoting safety.

Though, Tesla does not appear to have a clear strategy for its ads yet. Musk told Faber he'd only just decided to try out advertising during the Tesla event.

The move is one that some Tesla investors had been calling for. In April, Tesla investor Ross Gerber said the electric-car maker needs to be more like Apple when it comes to advertising.

"Tesla will simply have to advertise, at some point they will figure this out," he wrote on Twitter. "That's why almost all companies advertise. To educate consumers on the products."

Musk did not specify where Tesla will begin advertising its products. But, Wedbush tech analyst Dan Ives called the decision a "big step forward" in combating rising EV competition in a tweet on Tuesday.

Over the years, Tesla has promoted its products using less traditional methods. The brand has relied heavily on promotion from Musk. The billionaire often tweets about Tesla and its various offerings on his Twitter profile, which has nearly 140 million followers. His image as the second-richest man in the world has also become synonymous with the brand.

In the past, Musk has said he hates advertising and Tesla prefers to put its money toward research and development rather than promotional content. Though, he appointed a top advertising chief as his successor as Twitter CEO last week, so there have been signs Musk's stance on the issue is softening. Shortly after Musk bought Twitter, SpaceX bought an ad campaign for its Starlink satellite internet service on the site.

Read the original article on Business Insider