Tesla spent $200,000 to advertise on Elon Musk’s X so far

April 17, 2024 by admin 41 Comments

Tesla confirmed that it spent $200,000 to advertise on Elon Musk’s X, formerly Twitter, so far.

For years, Musk has famously said that he despises advertising. He said that Tesla doesn’t pay or provide discounts for celebrities to drive its cars and that the automaker doesn’t pay to advertise – though we have seen exceptions before.

Tesla fans and investors have often suggested that the company at least try it, but the CEO consistently pushed back against the idea – going as far as saying that he “hates” advertising.

But interestingly, things started to change after Musk bought Twitter, which is reliant on advertising.

A few months after Musk acquired Twitter, Tesla held its annual shareholders meeting and the CEO was asked about Tesla starting to advertise.

Musk even pointed out the irony of the situation:

“It’s indeed ironic. Twitter is highly dependent on advertising. Hear I am, never really used advertising before and now I have a company that is highly dependent on advertising. I guess I should say that advertising is awesome and everyone should do it.”

The CEO then announced that Tesla would indeed start to advertise.

Many suspected that this would be a way for Musk to transfer more money from Tesla to Twitter. As we previously reported, Tesla has already started to pay for over a dozen premium accounts on Twitter.

Last year, Tesla did start advertising with some targeted ads on Google, but it stayed away from Twitter, now X.

We had doubts that Tesla would start advertising on X because of the conflict of interest nad on top of it, Musk himself ad mitted that it would be “preaching to the choir.”

However, we were wrong.

X users reported starting to see Tesla ads on X starting in February 2024.

Today, with the release of its proxy statement for its 2024 shareholders meeting, Tesla confirmed that it spent $200,000 on advertising on Elon Musk’s X:

X is party to certain commercial, consulting and support agreements with Tesla. Under these agreements, X incurred expenses of approximately $1 million in 2023 and approximately $0.02 million through February 2024, and Tesla incurred expenses of approximately $0.05 million in 2023 and approximately $0.03 million through February 2024. As part of a multi-platform advertising campaign, Tesla also directly or indirectly purchased advertising on X, which totaled approximately $0.2 million through February 2024.

Tesla has to disclose transactions with “related parties” of its board members and executives.

The other transactions mentioned with X, including the $1 million of “incurred expenses”, is believed to have to do with Musk using Tesla engineers at X:

Elon Musk asked 50 Tesla engineers to “volunteer” at Twitter. Board said it was tracking the situation, but it started after the fact.

Twitter ended up paying $1 million to Tesla for the “volunteering” services.

It does sound like the CEO of a public company asked employees of… https://t.co/XN8NMMLFio pic.twitter.com/2z7noA9vJ5

— Fred Lambert (@FredericLambert) April 17, 2024

The information included in the proxy makes it unclear if Musk asked Tesla’s board to use the engineers or even if X ended up paying for the services as it is only listed as “incurred expenses”.

Electrek’s Take

This is such a strange situation that you just generally not see at major companies like Tesla.

It’s clear that Elon didn’t want Tesla to advertise on Instagram and Facebook, but it did anyway at the same time as it started advertising on X – seemingly to make it easier to swallow.

But these transactions between Tesla and X are for sure going to be investigated since even though Tesla obviously tries to keep things as vague as possible in the statement, statements and testimonies around his compensation lawsuits point to Elon not asking Tesla’s board to use Tesla engineers and after the fact, they made this “$1 million deal” to make things OK.

It’s dangerous legal tight rope to use resources of a public company you manage for a private company you own.

This article was originally published by Electrek.co. Read the original article here.