But this week’s earnings, showing a 9% drop in first-quarter revenue, underscore some of the wider economic challenges for the carmaker.
Early Facebook marketing efforts
Assembled in December 2023, the advertising unit was led by longtime Tesla marketer Alex Ingram, whose role has also been eliminated.
A central part of the team’s mission was to increase pricing awareness and drive customer engagement. Its inception was revolutionary for the company, which has relied on word of mouth, emails, incentivized referrals and a front-facing CEO in Musk to drive sales.
Within two months, the growth content division—comprising marketers, strategists, creatives and producers—debuted a series of basic ads on Facebook, YouTube and X.
The paid-for content comprised product and feature shots overlaid with captions and music. Some were more playful, including one highlighting the ability to turn the car lock sound into a fart noise.
While it was gearing up for a hard sell, the business spent approximately $6.4 million in 2023 on U.S. digital advertising across search, display ads, mobile, online video and paid social, according to estimates from ad intelligence firm Vivvix. This was a huge uptick on its reported $175,000 ad budget for 2022.
Cutting headcount saves more than $1 billion annually
On Tuesday (April 23), Tesla reported a 9% drop in first-quarter revenue to $21.3 billion from the fourth quarter’s $25.17 billion mark.
Vaibhav Taneja, Tesla’s chief financial officer, blamed slowing global electric vehicle sales, an uncertain economy, production issues and increased expenditures for the company’s first-quarter slump.
Taneja forecasted that the “hard but necessary decision” to reduce headcount would save the company more than $1 billion annually.
Musk took a more existential view of the cuts to marketing and other corners of Tesla when addressing questions from investors on Tesla’s earnings call, equating business operations to human gestation: “A company is like a creature growing,” he said. “If you don’t reorganize it for different phases of growth, it will fail.”
While he didn’t address the marketing team specifically, he said: “We’re not giving up anything significant that I’m aware of.”
