Tesla (TSLA) keeps winning

May 26, 2023

After surging more than 24% in the past month and nearing the pivotal $200 mark, Tesla (TSLA) shares are capturing the spotlight on Wall Street. This sharp rally appears to be fueled by a series of strategic shifts that could redefine the trajectory of the electric vehicle (EV) titan.

Notably, CEO Elon Musk has announced that Tesla, famously averse to traditional advertising, is ready to "try advertising" for the first time.

Concurrently, in a move that extends Tesla's influence in the EV industry, Ford (F) has inked a deal with the company to grant its EV customers access to Tesla's vast Supercharger network.

Here are the basics…

Tesla's Advertising Pivot:

Tesla, which has famously shied away from traditional advertising, is set to test the waters. CEO Elon Musk, known for his aversion to advertising, has confirmed that the EV giant will "try advertising" in a new strategy shift​.

  • Investor Enthusiasm: The announcement was made at Tesla's recent annual shareholder meeting, where Musk noted the unexpected enthusiasm from investors about the move towards advertising. He clarified that this would be a trial period​.
  • Irony and Strategy: Musk acknowledged the irony in the decision, given his past criticisms of other automakers' heavy reliance on advertising. Tesla has traditionally prioritized using funds for product improvement rather than promotion, contrasting with automakers who can spend up to $4,000 per vehicle on advertising​.
  • Creating Demand: The move towards advertising comes as Tesla seeks to create demand to align with its increased production capacity. To this end, the company has typically relied on price cuts​1​.

Informative and Entertaining Ads: In a follow-up interview, Musk suggested that Tesla's ads could be "informative and entertaining," focusing on some of the automaker’s lesser-known features. This approach aligns with Musk's belief that if ads approach content in this way, they can be more effective​​.

Is this the first ad?

Ford (F) joins forces with Tesla (TSLA):

Following the Biden administration's announcement that Tesla's Supercharger network would be opened to non-Tesla electric vehicles, Ford has reached an agreement with Tesla. This deal will grant Ford's EV customers access to approximately 12,000 Supercharger stations across North America, giving them unprecedented access to the largest network of fast chargers in the US and Cana​da.

Ford's EVs to use Superchargers from 2024: Starting in 2024, customers of Mustang Mach-E, F-150 Lightning, and E-Transit will be able to utilize Tesla Superchargers through an adapter and software integration. This access will be facilitated by payment activation through FordPass or Ford Pro Intelligence.

Ford swapping charging ports to Tesla's standard: As part of the partnership, Ford is swapping its Combined Charging System (CCS) charger port for Tesla's North American Charging Standard (NACS). This move indicates that future Ford EV owners will not require an adapter for Superchargers after 2025, making Ford the first major automaker to adopt Tesla's NACS.

We remain bullish on Tesla as the ONLY reasonable play in the booming EV sector.

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