The first seven months of 2022 saw a decrease in advertising expenditure in the automobile sector. According to Teslarati, Tesla does not spend any money on advertising, but the drop in expenditure may be an indication of difficulties for other automakers that is striving to catch up to Tesla’s lead in electric vehicles.
The automotive sector spent $4.8 billion on advertising between January and July 2022, a 4% decrease from the previous year, according to Reuters. Meanwhile, the total amount spent on advertising during the first seven months of 2022 was 12.7% lower than it was during the same period in 2019 ($5.50 billion).
Furthermore, Standard Media Index (SMI) figures show that of the $4.80 billion in advertising expenditures, digital advertising accounted for 52%. This reflects how the automotive sector should concentrate more on its own products than on Tesla.
Having said that, it is evident that Tesla has been receiving more attention from automakers than their own vehicles. In fact, several executives of rival automakers and even software firms often criticize Elon Musk, Tesla’s clients, and the its products and services on Twitter.
On the other hand, Polestar paid for a Super Bowl LVI advertising that featured Elon Musk, Tesla, and Mars more prominently than it did its own products. Salesforce has also joined the craze, with its attention largely directed at Mark Zuckerberg and Elon Musk.
It is worth noting that compared to all other manufacturers, Tesla spends more money on research and development than ads. In fact, Tesla earned the highest R&D investment per vehicle sold at $2,984 as of March 2022, according to a StockApps.com study.
The Visual Capitalist research, which offered an R&D spending comparison between Tesla, Ford, Toyota, General Motors, and Chrysler in October 2021, was supported by data from the Stock Apps study.
|Automaker||R&D spend per car sold||Ad spend per car sold||R&D per dollar of advertising|
Graph credit: Visual Capitalist
Reuters pointed out that despite continued robust demand for vehicles, the reduction in advertising corresponded with inventory bottlenecks and lower sales. Having said all that, these auto manufacturers should start expanding their research and development efforts instead of concentrating on Tesla and Elon Musk’s moves in the automotive sector.