Why are Tesla’s ads on Facebook concerning?

After launching Tesla advertising on his social network Tesla, Elon Musk is expanding his reach to rival Facebook. A bad idea?

Being anti-conformist is the creed of Elon Musk, CEO of Tesla. The same goes for communication to promote and sell his products. Advertising? Never!

This mindset persisted until 2023, when Tesla likely reached its peak. The Model Y was the best-selling car in the world, riding on genuine technological dominance and a still slow competition. However, each day this competition becomes tougher and presents arguments that are bending Tesla.

The American manufacturer announced, on March 20, 2024, that it would need to reduce operations at its Shanghai factory (China), due to insufficient demand. Understand that demand is declining, as this very factory was operating at full capacity as recently as 2023. The signs of Tesla’s slowdown are numerous, and the financial markets are not mistaken: the stock has plummeted by 31% in six months.

After X, ads on Facebook

The information would not be so dramatic if it weren’t common knowledge that Elon Musk harbors a personal hatred for Facebook and its founder, Mark Zuckerberg. So much so that, six years ago, Tesla deleted its page on the world’s most popular social network. A strange decision for gaining visibility.

Today, Tesla faces the reality: sales are declining, stockpiles are rising, and there is a need to increase brand awareness. Tesla is currently known only to early adopters of electric vehicles. But becoming “universal” will require a much greater effort.

A paradigm shift has occurred in the minds of Tesla’s leaders. Following X (formerly Twitter), Google, and YouTube, the Californian firm is now launching its promotional campaigns on Facebook. Price is the central argument of these communications, a dangerous game when claiming to be a Premium brand.

This double play poses a real danger for Tesla in the long run: you cannot sell cars for $30,000 and others for $200,000. No brand has ever successfully managed such a large gap. A side must be chosen, and thus Tesla opts for volume. However, there will always be cheaper alternatives in this market, primarily from Chinese manufacturers. And in the high-end market, years of legitimacy are required to carve out a space.

Tesla stands at a crossroads in its history: which direction to choose? Its future will depend on it.

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