Research on Tesla’s Product Marketing Strategy
Zeyu Yu
Economic school, Ohio state university, Columbus, U.S.A.
Keywords: Business, Economics, Management.
Abstract: Tesla’s remarkable rise in the electric vehicle (EV) industry is a result of its technological innovations,
strategic market positioning, and unique marketing approaches. This study examines Tesla’s strengths,
including its leadership in battery technology, autonomous driving, and vertical integration, as well as its
ability to maintain a strong brand identity associated with innovation and sustainability. Additionally, Tesla’s
marketing strategies—relying on social media, word-of-mouth, and experiential engagement rather than
traditional advertising—have contributed significantly to its success. However, the company faces challenges
such as production scalability, quality control issues, and market competition. This paper also explores
opportunities for Tesla in emerging markets, battery advancements, and AI-driven autonomous driving while
addressing potential threats from increasing competition, regulatory changes, and economic fluctuations.
Finally, recommendations are provided for optimizing Tesla’s marketing strategy, enhancing customer
service, and maintaining long-term market leadership in the evolving EV industry.
1 INTRODUCTION
Tesla is an important electric vehicle company. In
2003, it was founded by engineers Martin Eberhard
and Mark Tarpenning. Later, Elon Musk invested the
company and joined in. Musk became chairman, and
finally he became CEO. Tesla has transformed from a
small company to a head of the industry of the electric
vehicles. It made a revolution on the traditional
automotive industry under the influence of its
outstanding electric vehicle performance and
sustainable development vision. Right now, Tesla has
become one of the most influential and innovative
companies in the global automotive industry,and it
achieved great progress in electric vehicle technology,
energy storage, and sustainable energy solutions.(U.S.
Securities and Exchange Commission. (n.d.). Form
10-K. Washington, DC: Author.)
Tesla's journey began with the launch of the Tesla
Roadster in 2008, which was the world's first legally
driven electric sports car and showcased the enormous
potential of lithium-ion battery technology.
Subsequently, the Model S luxury sedan released in
2012 set new standards for electric vehicles in terms
of range, performance, and technological innovation.
Next, Tesla launched the Model X (high-performance
SUV), Model 3 (more affordable sedan for the mass
market), and Model Y (compact SUV), further
consolidating its dominant position in the electric
vehicle market. In addition, Tesla has also ventured
into the energy sector, launching solar panels, energy
storage systems such as Powerwall and Powerpack,
and establishing the Tesla Energy division.
Tesla's market positioning is unique, integrating
the automotive, technology, and energy industries.
Unlike traditional car manufacturers, Tesla is more
like a technology company that integrates advanced
software, artificial intelligence, and autonomous
driving technology, and has established its
competitive advantage through a direct-to-consumer
sales model, a global Supercharger supercharging
network, and continuous Over the air (OTA) software
updates.
Moreover, Tesla had created an own sign of
innovation, sustainable development and high-quality
experience, which attracted a lot of consumers. The
signs of Tesla made a strong market competitiveness
for it in the competition of the market
Despite Tesla's reputation for cutting-edge
technology and sustainable development concepts, its
marketing strategy has also played a crucial role in the
company's success. Unlike traditional car
manufacturers that rely on large-scale advertising,
Tesla adopts non-traditional marketing strategies,
mainly relying on word-of-mouth communication,
700
Yu, Z.
Research on Tesla’s Product Marketing Strategy.
DOI: 10.5220/0014002100004916
Paper published under CC license (CC BY-NC-ND 4.0)
In Proceedings of the 2nd International Conference on Public Relations and Media Communication (PRMC 2025), pages 700-705
ISBN: 978-989-758-778-8
Proceedings Copyright © 2025 by SCITEPRESS – Science and Technology Publications, Lda.

brand loyalty, social media interaction, and public
relations to enhance brand influence and drive sales.
One of Tesla's most effective marketing strategies
is its strong brand narrative, positioning itself as a
transformative enterprise committed to accelerating
the global transition to sustainable energy. In addition,
Tesla CEO Elon Musk's personal brand influence has
greatly driven the company's marketing efforts. He
interacts directly with consumers through social media
(especially Twitter/X) and continues to keep Tesla in
the media spotlight through high-profile public events.
In addition, Tesla also utilizes viral marketing, referral
programs, and experiential marketing (such as test
drive events, Tesla AI Day, and Battery Day) to
enhance consumer interest and maintain customer
loyalty.
Tesla excels in creating market heat for product
releases, and its new products can attract global
attention once they are released. This marketing
approach not only enhances brand assets and user
engagement but also allows the company to maintain
a competitive advantage without traditional
advertising.
The method conduct research on Tesla's industry
data and business specialties through investigation.
The significance of this study is that it can provide
valuable idea for businesses on how to establish a
strong brand without relying on traditional
advertising. By studying Tesla's successful
experience, companies in other industries can learn
from brand narrative, customer interaction, and digital
marketing strategies to enhance their market
competitiveness. In addition, this study will provide
important idea into the marketing trends of the future
automotive industry, especially the marketing models
of the electric vehicle market.
2 SWOT ANALYSIS OF TESLA
2.1 Strengths
Tesla has become the dominant force in the electric
vehicle (EV) market, possessing multiple main
strengthens includes technological innovation, great
signs, unique business model, and global expansion
strategy, collectively driving its success and market
positioning.
2.1.1 Technological Innovation
One of Tesla's most significant advantages is its
technological leadership in the electric vehicle
industry. Tesla is at the forefront of the industry in
battery technology, software integration, and
autonomous driving. The battery technology
independently developed by the company enables its
electric vehicles to have ultra long range capabilities,
such as the Model S and Model X with a range of over
400 miles, far exceeding their competitors. In
addition, Tesla continues to conduct research and
development, launching 4680 batteries to improve
energy density and reduce costs.
Tesla's Autopilot and FSD software are also its
core competitive advantages. Based on data collected
from millions of Tesla cars worldwide, its artificial
intelligence (AI) driven driving assistance technology
is continuously optimized. In addition, Tesla's OTA
(Over the Air) software update mechanism enables
vehicles to be continuously upgraded, and customers
can obtain the latest features without having to go to
the 4S store. AI root (2024) Tesla Made Its 100
Millionth Battery. Robots Played a ‘(Very) Small
Role.’
2.1.2 The Idea and Market Leadership
Position
Tesla has established an image of innovation,
sustainable development and high-quality
experience. Tesla is not only an auto company, but
also a technology enterprise that creates a
differentiated competitive advantage through
software and energy solutions. This unique
positioning has attracted a loyal customer base,
closely linking the Tesla brand with advanced
technology and environmental concepts.
In addition, Tesla maintains a leading position in
the market for electric vehicle sales. The Model 3 and
Model Y have become the world's best-selling
electric vehicles, demonstrating their strong market
demand. Tesla's Gigafactories established in the
United States, China, and Germany have further
enhanced production capacity, reduced
manufacturing costs, and consolidated market
dominance.
2.1.3 Unique Business Model and Vertical
Integration
Unlike traditional car manufacturers that rely on
third-party dealers to sell cars, Tesla adopts a direct
to consumer (DTC) model, selling directly to
consumers through its own stores and online
platforms. This model not only enhances brand
loyalty but also increases profit margins and controls
customer experience.
Tesla's vertical integration strategy is also a major
advantage. The company independently designs,
Research on Tesla’s Product Marketing Strategy
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produces, and sells batteries, software, and charging
infrastructure, reducing reliance on external
suppliers. Its Supercharger Network is the world's
largest network of fast charging stations, providing
great convenience for car owners and enhancing
brand loyalty.
2.2 Weaknesses
Despite Tesla's many advantages, it still meets
difficutiesin production expansion, high costs, quality
control issues, and a high dependence on Elon Musk's
leadership, which may affect its long-term success.
Tom Carter (2025) Tesla workers reportedly faced
temperatures of up to 100F because of a faulty
furnace door.
2.2.1 Production and Expansion Challenges
One of Tesla's biggest weaknesses is the unstable
expansion of its production scale. Despite the
increase in production capacity, it is still plagued by
supply chain disruptions, manufacturing bottlenecks,
and delivery delays. For example, the release of
Cybertruck and second-generation Roadster has been
delayed multiple times, affecting consumer trust.
In addition, Tesla meet difficuties in its global
expansion process, such as huge capital expenditures
and the complexity of establishing super factories in
new markets. Its highly dependent production bases,
such as the Shanghai Gigafactory and the Berlin
Gigafactory, expose the company to regional risks,
such as government regulations and economic
fluctuations.
2.2.2 High Production Costs and Price
Sensitivity
Despite Tesla continuously reducing battery costs, its
vehicle prices are still higher than those of its fuel
powered and some electric vehicle competitors.
Tesla's high-end pricing limits its popularity in
emerging markets and makes it difficult to attract low
- and middle-income consumers.
In addition, the company also faces profitability
challenges due to fluctuations in the cost of main
battery raw materials such as lithium, nickel, and
cobalt. If production costs remain high, Tesla may
find it difficult to compete with EV manufacturers
such as BYD, Volkswagen, and Hyundai that offer
more competitive prices.
2.2.3 Quality Control and after-Sales
Service Issues
Tesla's quality control issues have been criticized.
Customer feedback indicates that issues such as paint
defects, body assembly errors, and component
failures are quite common. In addition, in some
markets with weak after-sales service networks,
consumers face problems such as long waiting times
for repairs and shortages of parts, which affect
customer experience and great signs.
2.2.4 High Dependence on Elon Musk's
Leadership
Tesla's success is closely related to Elon Musk's
vision and influence, which poses leadership risks for
the company. Although Musk's innovative thinking
has driven Tesla's development, his multi line
operations on projects such as SpaceX, Neuralink,
and X/Twitter have raised concerns about his
distraction. In addition, Musk's social media
comments and controversial behavior have also led to
fluctuations in stock prices and reputational risks for
the company.
2.3 Opportunities
Tesla has multiple growth opportunities to further
strengthen its market position, including expanding
into emerging markets, innovating battery
technology, increasing global demand for EVs, and
launching new products.
2.3.1 Expand into Emerging Markets
Tesla has performed strongly in the North American,
European, and Chinese markets, but still has the
opportunity to enter regions with huge potential for
electric vehicle demand growth, such as India,
Southeast Asia, and Latin America. By establishing
localized production bases and more competitively
priced models, Tesla can further expand its market
share.
2.3.2 Innovation in Battery Technology and
Energy Solutions
Tesla's continuous investment in battery technology
research and development has brought tremendous
opportunities. The new 4680 battery is expected to
improve energy density and reduce costs, making
electric vehicles more competitive. In addition,
Tesla's research in solid-state batteries, waste battery
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recycling, and other fields also provides advantages
for its sustainable development.
In addition to its automotive business, Tesla's
energy division also has vast growth potential. The
market demand for Powerwall, Powerpack, and
Megapack is growing, and Tesla's solar business is
expected to benefit from the global promotion of
renewable energy.
2.3.3 Autonomous Driving and the
Development of Artificial Intelligence
If Tesla successfully achieves L4 or L5 level
autonomous driving, its Robotaxi and ride sharing
services will become new sources of revenue, further
enhancing the company's competitiveness.
2.4 Threats
Tesla faces many external threats, including
intensified market competition, changes in
regulations and policies, economic recession and
supply chain risks (Wilson, 2023).
2.4.1 Intensifying Market Competition
The competition in the global electric vehicle market
is becoming increasingly fierce, and traditional car
companies such as Ford, General Motors,
Volkswagen, and Toyota are accelerating their EV
transformation. In addition, the high cost
performance EVs launched by Chinese car companies
such as BYD, NIO, and Xiaopeng pose a challenge to
Tesla. If Tesla fails to continue innovating, it may
lose market share. Robert Lea (2025) Ford to invest
€4.4bn in its electric car business in Germany.
2.4.2 Regulatory and Legal Risks
As a leader in autonomous driving technology, Tesla
faces strict government supervision. Factors such as
changes in autonomous driving regulations, traffic
safety standards, and reduced EV subsidies may
affect Tesla's sales and profitability (Johnson, 2025).
2.4.3 Economic Recession and Supply Chain
Challenges
Global economic instability may affect consumers'
ability to purchase high-end EVs. In addition, supply
chain challenges such as semiconductor shortages
and lithium resource supply issues may weaken
Tesla's production capacity and increase costs.
Tesla maintains its market leading position
through technological innovation, brand influence,
and vertical integration. However, the challenges of
capacity expansion, quality issues, and market
competition pressure still need to be effectively
managed. By expanding into emerging markets,
innovating in batteries, and developing artificial
intelligence, Tesla can continue to grow and maintain
a competitive advantage in the constantly evolving
electric vehicle industry (Davis, 2020).
3 ANALYSIS OF TESLA’S
MARKETING STRATEGIES
3.1 Main Marketing Strategies
Tesla's marketing strategy is unique. Unlike
traditional car manufacturers, Tesla hardly engages in
traditional advertising, but relies on word-of-mouth
marketing, social media influence, brand story
building, and experiential marketing to drive market
growth. Tesla's marketing heavily relies on social
media, especially Twitter (now X), YouTube, and
Instagram. Elon Musk, as the spokesperson for Tesla,
frequently posts information about Tesla's products,
technology updates, and company vision on social
media, which not only saves traditional advertising
costs but also greatly enhances brand influence
(Brown, 2021). Tesla not only sells electric vehicles,
but also shapes a brand story. Consumers buying
Tesla is not just buying a car, but also supporting
environmental protection and technological
innovation. This brand concept has created strong
brand loyalty for Tesla among environmentalists,
high-end technology enthusiasts, and young
consumers (Smith, 2022).
3.2 Advantages of Tesla's Marketing
Strategies
Tesla's marketing approach has multiple advantages
that help it maintain a leading position in a fiercely
competitive market. Due to the absence of traditional
advertising expenses, Tesla has saved a significant
amount of marketing costs and achieved higher
market returns through social media, word-of-mouth,
and viral marketing. Tesla's brand is not just about
electric vehicles, but a symbol of technological
innovation, environmental protection, and futurism.
This brand culture makes consumers more willing to
become "supporters" of the brand, resulting in high
user loyalty and repeat purchase rates. Tesla interacts
directly with consumers through social media to
establish a sense of community and increase user
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engagement. At the same time, OTA software updates
constantly provide new features, keeping car owners
always fresh (Doe, 2023).
3.3 Challenges and Limitations
Tesla's marketing strategy is highly innovative, it still
faces some challenges and limitations. Tesla's
marketing heavily relies on Musk's personal brand,
and if he reduces his activity on social media or
creates negative public opinion in the future, it may
affect Tesla's market performance. In addition,
Musk's involvement in multiple companies such as
SpaceX and Neuralink may also distract his attention.
As more and more car manufacturers enter the EV
market, Tesla's brand story and marketing approach
may face innovation fatigue, making it difficult to
sustainably attract consumers. Especially as
competitors begin to adopt sustainable marketing,
Tesla's brand uniqueness may be challenged.
Although the direct sales model brings brand
consistency, compared to the traditional dealer
network, Tesla's limited number of stores has resulted
in insufficient sales and service coverage in some
regions, affecting the purchasing decisions of
potential customers (Ji, 2024).
4 OPTIMIZATION
SUGGESTIONS FOR TESLA'S
MARKETING STRATEGY
Currently, Tesla mainly relies on social media
marketing and word-of-mouth communication.
Although this approach is effective, its market
penetration is still limited. In order to reach a wider
audience, Tesla can consider moderately increasing
its digital marketing and advertising investments.
With the popularity of short video platforms such as
TikTok, Instagram Reels, Bilibili, etc. among young
consumers, Tesla can increase its efforts in short
video marketing by collaborating with automotive
KOLs, technology bloggers, and environmental
advocates to increase brand exposure and social
discussion. Tesla can use Google Ads, Facebook Ads,
LinkedIn, Tiktok and other digital advertising
platforms to reach potential consumers who have not
yet contacted the Tesla brand through data-driven
precise launch. For example, placing short video
advertisements on video platforms such as YouTube
to showcase autonomous driving capabilities,
extended battery life, and charging network
advantages. In addition, although Tesla's products are
popular in the market, there is still a lot of room for
improvement in its after-sales service and customer
support system. Optimizing customer experience is
crucial for maintaining brand loyalty. Tesla should
accelerate the construction of more official service
centers, especially in rapidly growing emerging
markets, to ensure that car owners can quickly access
repair and maintenance services. At the same time,
establish cooperation with third-party repair agencies
to reduce repair waiting time and improve customer
satisfaction. Tesla can launch AI customer service,
online Q&A platforms, and user communities to
make it easier for car owners to obtain support.
Collecting feedback from car owners through regular
customer satisfaction surveys and respond promptly
to customer needs in OTA updates or new product
development (Lea, 2025).
5 CONCLUSION
Tesla's success in the electric vehicle industry is
attributed to its technological leadership, innovative
business model, and unique marketing strategy. By
integrating cutting-edge battery technology, auto
drive system and direct to consumer sales model,
Tesla has established its position as a market leader
in the field of electric vehicles. Its strong brand image
closely linked to sustainability, innovation, and high
performance has had a profound impact on its global
presence. However, Tesla faces many challenges,
including the expansion of production scale, high
manufacturing costs, quality control problems and
dependence on Elon Musk's leadership. In addition,
the increasingly fierce competition from traditional
car manufacturers and emerging electric vehicle
companies poses a significant threat to their market
dominance. The changes in regulatory policies and
economic fluctuations have further intensified the
uncertainty of Tesla's development. Despite facing
these challenges, Tesla still has enormous expansion
opportunities, especially in emerging markets,
advancements in battery technology, and AI driven
autonomous driving technology. By focusing on
these areas, Tesla can consolidate its competitive
advantage and maintain its leading position in the
industry. To maintain long-term success, Tesla
should optimize its marketing strategy, expand digital
advertising investment, leverage new social media
trends, and improve after-sales service. In addition,
improving service infrastructure and adopting AI
driven support systems to enhance customer
experience is crucial for maintaining brand loyalty. In
summary, although Tesla has fundamentally
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transformed the automotive industry and established
a strong market position, continuous innovation,
strategic expansion, and increased customer
engagement will be key to maintaining its leading
position in the rapidly developing electric vehicle
market.
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