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Innovation Vs. Advertising

Tesla Innovation

Tesla keeps plowing a lot of money into R&D, not only for automation but also in the bettering of their vehicles. As their build volumes increase this amount should decrease.

Tesla has become one of the most valuable companies in the world, with car deliveries almost amounting to one million last year despite global supply chain issues and the dampening economic effects of the pandemic. Incredibly, all of this has been achieved with zero spending on traditional advertising.

As this chart based on research by Visual Capitalist shows, the reliance on word of mouth marketing (and CEO Elon Musk’s Twitter account) allows a far larger budget for research and development. Ford and Toyota’s combined spend per car sold on advertising and R&D amounted to $3,171 – very similar to the amount Tesla sunk into innovation.

Tesla: Innovation Over Advertising? AUTOMOTIVE by Martin Armstrong, Mar 21, 2022