23+ Pros and Cons of Tesla Marketing Strategy (Explained)

The year 2003 saw the foundation of the company Tesla Motors, later renamed Tesla Inc. Ten years later, it became profitable for the first time in 2013.

Based in the state of California in the United States of America, the company’s specialty lies in manufacturing Solar Panels, energy from lithium-ion batteries, and electric vehicles.

It only started being profitable in 2013. Elon Musk, as its CEO, Tesla has a vision to be the company that leads the world to a cleaner tomorrow.

? Tesla Marketing Strategy: Pros And Cons

Pros of Tesla Marketing Strategy	Cons of Tesla Marketing Strategy
The company is technology driven	Their presence in the market is limited
The market strategy as a whole is based on attributes	Restricted Supply Chain
Using Brand Value	They keep their prices high
Diversifying the business	Owning and operating everything
A clear mission in mind	The particular feeling associated with owning a Tesla
Always true to themselves	They face serious competition
Using controversy to their advantage	The specific feeling related to owning a Tesla
The specific feeling associated with owning a Tesla	Dependence on Electric Vehicle Market Growth
Intelligently segmenting the market	Lack of Model Variety
Not spending on advertising	Limited Distribution Channels

✔️ Advantages Of Tesla Marketing Strategy

The company has cultivated a strong brand image as a leader in electric vehicles and sustainable transportation, attracting environmentally conscious consumers.

Tesla leverages word-of-mouth marketing through its passionate customer base, generating buzz and credibility without relying heavily on traditional advertising.

Technology-driven

Tesla is more a technology company than just an automotive company, focusing its maximum efforts on constructing technology platforms.

This reflects in the company’s marketing, which clearly shows Tesla has built the infrastructure to support the operation of the cars manufactured by the company and selling them.

Attribute-based

The whole approach of Tesla towards marketing is attribute-based. So basically, the company focuses mainly on informing potential buyers about the different aspects of the products that the company has put up for sale.

These attributes can include the product’s size, weight, color, price, functionality, etc.,

Brand Power

Tesla has taken electronic vehicles from slow-paced and small cars to incredibly alluring vehicles with enviable speed.

All while keeping the price of the vehicles in an affordable range. This excellent reputation has dramatically boosted the brand power, which the company uses well.

Business Diversification

This is one of the most significant advantages of Tesla’s marketing strategy. The company realized the untapped potential of venturing into the markets associated with the products Tesla was already manufacturing.

An example is venturing into the Solar Roof Tile market as it compliments the rechargeable lithium-ion battery market, which Tesla already used to manufacture.

Mission Statement

Tesla’s mission is to end the world’s reliance on fossil fuels to create a cleaner world.

Tesla aims to create cleaner transportation and cleaner energy products(e.g., electric cars) more readily available and affordable to the general public so that the world can transition to clean and sustainable energy.

Authenticity

This feature of Tesla’s marketing strategy sets the company apart. The whole company and everyone directly associated with it are unabashedly themselves.

This leads to Tesla being one of the world’s most carefree brands while still taking as one of the world’s most ambitious ones.

Controversy

Especially in the digital age, where news reaches every corner of the world in seconds, controversy can quickly multiply the audience base.

For Tesla, their CEO Elon Musk uses controversy to his advantage, getting caught in quite a number of them, keeping the spotlight shining bright on him and his company.

Exclusivity

Tesla, with no dealerships, eliminates any salesman, bargaining, etc. The price listed is always final.

A buyer can only configure and buy the car online without ever actually focusing on the actual model. Around a few weeks later, the buyer finally gets the car. This process associates a unique feeling of exclusivity with owning a Tesla.

Segmenting

During market segmentation, instead of anything else, Tesla focused all of their attention on the segment that allowed them to build model vehicles that are innovative as well, over the most extended period.

Their intelligent choices allow them to command a considerable brand identity with premium pricing and earn substantial profit(s).

Word of Mouth

Tesla, by its admission, does not spend any money on advertising.

The company believes that the buyers of their products will spread the word about the advantages of Tesla’s products, leading other potential buyers to purchase them.

❌ Disadvantages Of Tesla’s Marketing Strategy

Their high-priced vehicles limit accessibility for budget-conscious consumers, while their limited distribution channels make it difficult for customers in remote areas to purchase their cars.

Reliance on word-of-mouth and online marketing restricts brand exposure, and the limited range of vehicle models may not cater to specific preferences.

Additionally, Tesla’s success hinges on the growth of the electric vehicle market, introducing potential risks with market dynamics.

Market Presence

Tesla generates the maximum amount of the company’s total revenue from within the United States of America.

The company does not target the developing parts of the world and China. This strategy limits the company’s growth from the standpoint of speedy economic development in overseas markets.

Supply Chain

Tesla has a minimal supply chain. One of the significant factors contributing to this is the decision taken by the company to manufacture every single part of their products on their own.

The company lost over 650 million US dollars in the third quarter of 2017.

Price

The cars manufactured by Tesla are more costly than those of their competitors, especially those that run on an internal combustion engine.

This problem severely hinders the rate at which Tesla can grow their customer base while simultaneously bringing down their market share.

Vertical Integration

This is a massive challenge for Tesla, as they have decided to own and operate every part of the process of producing cars independently.

The biggest problem for this is that the number of enterprises to work with slowly decreases as globally dominant companies emerge in all the market segments.

Limits

Because not yet turned towards fully electric transportation, Tesla’s decision to manufacture only electric cars often turns away potential buyers.

This is because there can be several challenges in the present scenario with owning an electric car, like the scarcity of charging stations.

Competition

Tesla has several competitors in the electric car segment and has started decreasing their vehicles’ prices to sell more units.

They can recoup their losses in this segment with sales in the other car segments, like those with internal combustion engines. Selling only electric cars, Tesla does not have that advantage.

After severe analysis and extensive debates, a company adopts a marketing strategy to iron out any problems.

The marketing strategy of Tesla has several problems. Still, no one can deny that Tesla has become a brand to be reckoned with, and if they successfully achieve their vision, the whole world might be happier for it.