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Shareholder proposal: Tesla should spend $ 50 on advertising for each electric car built

Tesla has announced the date for its next Annual General Meeting – it will take place on July 7 in the afternoon as usual in the Computer History Museum in Mountain View and will also be broadcast on the Internet. In parallel to this information, Tesla has now published motions to be voted on at the meeting. In one of these, a private investor is demanding to spend $ 50 on classic advertising for each electric car produced. CEO Elon Musk has previously been against such activities – and a statement by the Tesla leadership also advises against the current proposal.

Tesla board wants to decide for itself

Advertisements by Tesla could help, among other things, to raise the profile of the brand and its electric cars and to create a counterweight to dispel doubts and insecurity from opponents as well as misinformation, the California shareholder, who claims to own 850 Tesla shares, explains Suggestion. Billions of consumers don’t even know what Tesla is, so advertising has never been more necessary or important than it is today.

Only $ 50 per car would amount to 25 million advertising expenses at 500,000 Teslas per year (the official minimum target for 2020), i.e. not a very high amount, and would only make up about one per thousand of the average sales price. Nevertheless, the Tesla Board, in which CEO Musk is also represented, clearly opposed the application in a statement: It was not in the best interest of the company and its shareholders. While suggestions from investors are welcome, experienced management is better placed to manage Tesla’s day-to-day operations, “including practices and expenses for sales and marketing.”

The board further points out that Tesla delivered “the record number of 376,656 electric cars in 2019 without traditional advertising and at relatively low marketing costs” and that it sold more of the Model 3 in the USA than BMW with the 3 Series, Mercedes with the C-Class, Audi with the A4 and Lexus with the IS. “Objective factors” would prove that Tesla and its products are known and are known even without paid advertising.

No Tesla advertising, but marketing

In fact, Tesla largely relies on its products and its CEO, who is as communicative as he is strong in opinion, to stay in the conversation – and more recently also on Musk’s rocket company SpaceX, which, for example, has just been broadcast live by astronauts in a Tesla Model X (but then aborted) start.

Most recently at the 2019 Annual General Meeting, Musk said that Tesla simply did not need advertising, but did not exclude it for all time. And that seems to have changed a bit. In March this year, a YouTuber said in a test of the new track mode in Model 3 that he was working “for Tesla” on this day. And in early May, a well-known Chinese influencer presented Tesla electric cars on a shopping platform, which she shouldn’t have done for free. And in the reply to the application, the board confirmed that Tesla now spends money, if not a lot, on marketing, unlike classic advertisements and spots.

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