>sells everything they can produce.

That is the important part. Their production capability is limited to a level that is below current demand. It therefore doesn't make any sense for them to invest in increasing future demand until their production capability consistently exceeds the level of current demand.

But their supply is constantly expanding and demand is following right up. They have 0 ads and yet everyone knows about Tesla.

Elon is one giant ad, and he has equity. Just because its not defined as traditional advertising, doesnt mean they dont promote the brand. They have physical car showrooms with large tesla logos. They litterally spent millions to put a tesla in space...

This was my first thought. Elon is constantly in the news or doing some memorable stunt. Tesla absolutely advertises it's just through Elon.

Has anyone calculated how much money he saved on ads doing that? Seems like a huge efficiency advantage compared to competitors.

From a Google search, Elon made 11 billion last year in tesla stock options pay, while the ceo of Ford made 11 million, and in 2020, ford spent 2.8 billion on advertising. So in the viewpoint that Elon does all the advertising for them, they are paying quite a premium for it.

But the study is about TV advertising effectiveness, and the OP mentioned it being very valuable in the auto industry. I just pointed out that the hottest brand in auto industry is spending 0 on TV or any ads for that matter.

What is your point? No one is claiming that advertising is the only way to increase demand. It is simply one option to increase demand, an option that Tesla has no use for at the moment.

If the hottest company in auto is spending 0 on ads are ads really that valuable to auto industry ?

Exactly. Every car company just needs to appoint Elon musk as it’s CEO.

That’s why we need Neuralink, so Elon can be in two places at once.

This seems like a joke about how this wouldn't work, but, I think it worked for SpaceX and it can work a few more times.

If Elon Musk is one of the richest men in the world and draws roughly a minimum wage salary, is salary really that valuable to building personal wealth?

That is the equivalent of what you are asking. Musk has other forms of income and wealth accumulation that other people don't have. Therefore his salary shouldn't be used to compare to people who don't have those other methods of income. Similarly Tesla has other advantages that help increase demand (or limit the upside of further increasing demand). Other companies that don't have those same advantages can still benefit from increasing demand through advertising.

The only conclusion we can draw from Tesla's lack of advertising is that the company leadership feels that it is not the best use of company money. Any attempt to extrapolate that out to the auto industry or advertising in general is making a lot of assumptions.

"Lack of advertisement" should be "Lack of conventional advertisement"

Musk is strongly associated with Tesla in many people's minds and he's very capable of keeping himself in the public's focus. Then there's SpaceX which literally launched a Tesla into space. Umm, that launch was advertising. Even if it didn't come out of an "Advertising" budget line. Every manned SpaceX launch uses a Tesla vehicle to get the astronauts to the craft and, in the US at least, SpaceX is hot the past few years.

If Toyota or Ford had a space launch company you could be confident they'd tie their trucks into it, drag the Ford Shuttle S150 out with a fleet of F150s. Who needs conventional advertisement when that's your public image?

Then there's the fact that Tesla's vehicles are still unique in the market place with few direct competitors (though that's changing). There's no need to spend money advertising when you're the only company making status symbol electric vehicles that are (somewhat) affordable. A Honda Fit, not a status symbol even if it is more practical financially. Honda and Toyota's midsize sedans aren't differentiable, not really. They rely on branding and conventional advertising to make people prefer one to the other. All the other auto makers are in that same situation with most of their vehicles.

It is semantic debate and what you are talking is certainly marketing, but it isn't really advertising. Advertising usually requires paying someone else to communicate the message.

> Musk has other forms of income and wealth accumulation that other people don't have.

Yes, most people don’t have billions of dollars of equities they can borrow against to finance their lifestyle.

"If Elon Musk is one of the richest men in the world and draws roughly a minimum wage salary, is salary really that valuable to building personal wealth?"

These rich boys take out loans at 0, or 1%, and take their pay from that.

I still don't know quite how the tax dodge works? It makes sence. You get a loan, and that is not taxed, and eventually pay it back at a low interest rate. I thought corporate expenditures were scrutinized a bit more though?

If you own stock that goes up 10% per year, and you take out a 5% loan against it, the appreciation in the stock more than covers the interest on the loan, so why would you ever pay it off?

When I was small, the same thing was said about Ferrari. Obviously we didn't understand that F1 is marketing as much as magazine ads are. In the same way though, Tesla might not do declarative advertising but things like Musk's appearance on Rick and Morty or favourable media coverage fulfil the exact same role.

The number of companies who could drop their advertising to $0 yesterday and still significantly outsell Tesla can not be counted with my hands.

They've done something smarter, created a cult of people that do the job for free

Is that actually true? As in, their line item for marketing is 0? Not advertising, marketing.

Based off the comments I guess this is tesla. Isn't this just based off of their inflated stock price. If someone was seriously considering buying the company they wouldn't make an offer based off the stock price?

I would not call Elon Musks Twitter and other public performances ‘no advertising whatsoever’. They don’t pay for it cash to adv companies, but they got in hot waters with SEC because of it, for example.

I didn't say they do no advertising, I said they spend 0 on ads.

Market cap (ie, stock price) is not a good indicator of present value, but perceived future value.

Edit: I also think TSLA isn't a car company. More like a battery company.

Someone here was arguing that advertising can't be measured only through impact on present sales but "good will and long term value". Tesla seemingly has good will beyond any competitors.

Also Tesla is buying battery cells, sells cars and expects to have third parties supply batteries long term - how can they be a battery company ?

Same way Apple is a computer company but Foxconn does most of the building of said computers?

But Apple sells computers ? Tesla is selling some battery installations from what I saw but their core business is cars. You could claim they are valued as a software company because of FSD, but I don't really see the battery angle, they would be not be anywhere close their valuation if they were valued on that angle.

>spends 0 on advertising

I mean there is probably a number you can put on having one of the most famous people on Earth hawking the brand 24/7 ...

Toyota doesn't advertise?

I think you saw the "brand value" list rather then the valuation of the company list:

https://www.visualcapitalist.com/worlds-top-car-manufacturer...

Does it??

Did you know about Tesla before Elon Musk?