With $0 dedicated to advertising, Tesla focuses its investments solely on research and development (R&D). A bet that pays off, since the brand has never had to change its strategy until now. The comparison with American competitors is striking.
Unlike traditional manufacturers, Tesla has never needed to invest in advertising to sell its models. A feat that relies almost exclusively on influence marketing, thanks in particular to its boss Elon Musk. This is one of the major differences with most competitors in the automotive sector.
When on each car sold, American historic manufacturers invest several hundred euros in advertising ($485 on average, or 440 euros, underlines a press release from StockApps on March 23, 2022), Tesla has no traditional advertising expenditure.
- Tesla: €0
- Ford: €410
- Toyota: €398
- GM: €345
- Chrysler: €581
This difference in strategy can be seen even more on expenses related to innovation, where Tesla still marks its difference.
No ads, but Tesla spends a lot on research and development (R&D)
By saving on advertising expenses, Tesla can therefore devote more budget to research and development. As we have seen over the years, innovation is key in the field of electric vehicles. If Tesla can keep its technological lead, it’s because the brand gives itself the means to innovate.
According to Statista data, the budget dedicated to research and development would have increased from 1.5 billion dollars in 2020 to more than 2.5 billion dollars in 2021. But it is above all on the part dedicated to innovation on each car sold, that we realize the difference with historical manufacturers.
According to data relayed by Visual Capitalist, Tesla’s R&D expenses amounted to around €2,600 per car sold in 2020. The result is clear, this budget almost corresponds to that of Ford, Toyota and GM combined.
A significant innovation budget that does not prevent delays and other hiccups
However, if the R&D budget is important, that is not everything. Tesla must adapt its production system which still forms a bottleneck in its growth projects.
And even if the investments are important in R&D, that does not solve everything. We also notice it in the development of certain projects, with more than substantial delays on the models announced, but still expected (at best for next year): Tesla Cybertruck, Tesla Roadster or even Tesla trucks.