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Tesla President: Only $6 per car is spent on advertising [Video]
Posted on January 05, 2017 by Matt Pressman
Guest Blog Post: Charles Morris is the Senior Editor of Charged, the magazine of electric vehicles, for which he writes a daily blog and regular print articles. He's also written five books including Tesla Motors: How Elon Musk and Company Made Electric Cars Cool, and Sparked the Next Tech Revolution.
Tesla’s President of Global Sales and Services, Jon McNeill, is emerging as a highly articulate spokesman for the company’s lofty goals. In a talk at the recent Inbound 2016* conference, Mr. McNeill explains how he was inspired to become a part of Tesla’s master plan to significantly change the world for the better. For 13 years, Tesla’s mission has been accelerating the transition to sustainable transport. Now, with the introduction of the Powerwall line of products and the acquisition of SolarCity, that mission has expanded to encompass sustainable energy as well.
Above: Tesla Model S (Instagram: autos_design)
When McNeill met Elon Musk, he (like Musk) was running two companies while raising a family, so when Elon offered him a job, he required some convincing. However, the Persuader of Palo Alto spoke to him about the deeper mission behind what Tesla is doing. “How would you like to join a platform that has the ability to change the world?” McNeill joined Tesla in November 2015.
Above: Tesla President Jon McNeill at Inbound 2016 (Twitter: @getinboundlabs)
At Inbound, McNeill explained that there are many reasons why the transition away from fossil fuels is so urgent, from the macro issue of climate change to the more personal issue of deaths caused by air pollution. As he noted in a recent interview with a Hong Kong TV station, 122 people died in auto accidents in the Asian metropolis last year, while over 2,000 died of auto emissions-related lung disease.
Above: Tesla Model X (Instagram: hectoralejandrosantiago)
A glance at McNeill’s resume makes it plain that he loves a challenge, but being in charge of marketing at a company that prides itself on having no marketing budget would seem to be a tough nut indeed. “Part of our culture is that we don’t sell,” says McNeill. As Elon Musk has said, if you produce a truly revolutionary product, the marketing will take care of itself. So how is this working out? McNeill points out that Model S is the fastest production car available under a million dollars, and the safest car on the market - its scores on safety tests are better than those of the first-runner up (an Audi) by almost a factor of two. Most would call that a revolutionary vehicle.
Above: McNeill discusses Tesla's 'selling without selling' ethos (Source: Inbound 2016*)
And yes, the marketing has done well so far on autopilot (so to speak). In 2015, the legacy automakers spent an average of $1,000 per vehicle on advertising. Tesla spent about $6. Four years ago, Tesla was building 2,500 cars per year. By 2018, it expects to produce 500,000 cars (combined for Model S, Model X, and Model 3). Of course, Tesla does a variety of things to keep its products in the spotlight, but the goal, at the sales centers as well as in the media, is to educate potential buyers, not to hit them with the traditional car company hard sell that consumers rightly hate.
Above: Tesla spends a $6/car on advertising — via slide 6 (Source: Inbound 2016*)
As McNeill describes it, his job is “to take all of the market-facing things off of Elon’s plate so that he can engineer and design.” However, Tesla's limited marketing emphasis might shift as the company grows from a niche automaker into a high-volume manufacturer, but the corporate culture of “selling without selling” is unlikely to change much. The task of Tesla’s sales head may be to give the cars (and batteries and solar panels) the space they need to sell themselves. The Zen of zero emissions.
*Source: Inbound 2016