Tesla’s Price-Focus Promotion Strategy ‘Not Very Smart,’ Gary Black Says As Carmaker Highlights Lower Model 3, Y Starting Rate

• As per Black, Tesla’s advertising must focus instead on “charging ease, range, performance, lowest operating costs and self-driving” capabilities. 
• Tesla doesn’t do traditional advertising, instead relying on word of mouth and its several affiliated X accounts to disseminate information and promote its products.
• Notably, all of Tesla’s vehicles besides the Model 3 and Model Y cater to a premium customer segment.

Tesla’s (TSLA) advertising strategy of highlighting the low price point of some of the company’s vehicles might not work for the brand, according to The Future Fund managing partner Gary Black.

In a post on X on Wednesday, the fund manager noted that Tesla is a premium brand and opined that the strategy of focusing on price is “not very smart.”

“The comms strategy should be to show how Tesla EVs offer the greatest benefits to consumers (charging ease, range, performance, lowest operating costs, self-driving) of any automotive brand,” Black added.

Ad In Question

Black’s opinion comes in response to Tesla’s posts on X highlighting that the company’s mass market offerings Model 3 and Model Y have a starting price below $40,000.

Tesla does not engage in traditional advertising, instead relying on word of mouth and its several affiliated X accounts to disseminate information and promote its products.

The new ad highlighting the price point of Model 3 and Model Y comes on the heels of Kelley Blue Book pinning the average price paid for a new car around $50,326 in December, marking an all-time high.

Are Tesla Cars Cheaper?

While the base version of both the Model 3 and Model Y in the U.S. start below $40,000, the remaining four versions of the Model Y available in the U.S. and the three variants of the Model 3 are all priced above $40,000. The higher-end variants of the Model 3 sedan and Model Y SUV start at $54,990 and $57,490, respectively.

Moreover, the company’s other three vehicle models cater to a more premium customer base. While the Model S starts at $94,990, Model X has a starting price of $99,990 and the Cybertruck $79,990. The more premium variants of all three have a price point above $100,000.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around TSLA stock stayed within ‘neutral’ territory over the past 24 hours while message volume remained at ‘normal’ levels.

TSLA stock has gained nearly 29% over the past 12 months. 

Read More: Dan Ives Says AI Adoption Set To Drive Growth In Enterprise Software: Report

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