Investor's Corner
Tesla spends $0 on ads, still tops automakers in organic engagement: report
A recent report from competitive intelligence analysis firm BrandTotal recently determined that Tesla has the strongest organic engagement in social media among automakers. The electric car maker was able to accomplish this despite spending $0 in paid advertising campaigns on platforms such as Facebook, Twitter, YouTube, and Instagram.
For its report, the competitive intelligence firm analyzed all paid and organic social media campaigns initiated by major automotive brands over a 30 day period. These include companies such as Toyota, BMW, Ford, Audi, Honda, Nissan, Infiniti, Lexus, Cadillac, Porsche, and Tesla in the United States. Based on BrandTotal’s figures, it appears that veteran automakers are still investing a large portion of their budget on Facebook, despite the platform seeing a decline in users over the past years.
Toyota is among the automakers who spent the most on Facebook, allocating 62% of its advertising budget to the social media platform. Other carmakers such as BMW (46%), Ford (55%) and Infiniti (52%) also focused their campaigns on the platform. Alon Leibovich, co-founder & CEO of BrandTotal, noted that a plausible reason behind this is Facebook’s older audience, which fits more with the target demographic of the carmakers.
“Facebook reigns supreme for paid campaigns among these four digital channels for major autos. Our data shows that when brands are looking to engage older audiences, they lean on Facebook to do so, while YouTube and Instagram are mostly used to reach younger audiences,” he said.
Other social media platforms that proved popular for advertising were YouTube, which took a third to almost half of the budget of brands like Honda, Cadillac, Porsche, and Audi. Instagram also proved very popular, with Porsche, BMW, and Infiniti spending 30-40% of their ad budget on the photo-sharing platform. Twitter takes the last place in BrandTotal’s list, with only BMW spending 20% of its budget on the site.
Standing in stark contrast from other carmakers is Tesla, which spent $0 in paid advertising on all social media platforms. Despite this, BrandTotal’s results point to the Silicon Valley-based electric car maker having the most organic engagements in social media. Tesla’s presence on Instagram was particularly prolific, with 55% of the company’s social activity happening on the photo-sharing site. Tesla also has a formidable presence on Twitter, with 11% of the company’s social media activity occurring on the platform. Of course, the presence of CEO Elon Musk’s personal Twitter account, which has over 26 million followers, augments Tesla’s social media presence further.
A company’s high organic engagement in social media happens when a brand attracts people that are highly engaged, according to Leibovich. This is particularly true for Tesla’s presence on Twitter, which sees daily activity from both the company’s supporters and skeptics. “Strong brands are able to command high engagement even without a robust digital ad spend. In Tesla’s case, we see their engagement numbers are high compared to other auto brands allocating spend in their digital campaigns. This may be a result of Tesla’s fans already being engaged and active users on Twitter and other platforms. The brand doesn’t feel the need to spend on paid social media marketing when their organic reach is so strong,” he said.
Tesla and Elon Musk’s strong online presence has proven to be a double-edged sword for the electric car maker. Musk’s Twitter account, for example, serves as one of Tesla’s most effective tools for the company to communicate with owners and enthusiasts, but it has also proven to be dangerous. The CEO’s Twitter account, for one, was a key reason behind the creation of safety features such as Sentry Mode, but at the same time, Musk’s tweets have also attracted the ire of regulators such as the Securities and Exchange Commission. The high interest garnered by Tesla and Elon Musk has also attracted an extraordinary amount of coverage from mainstream media, both negative and positive.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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