Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tesla Motors Inc (TSLA) Goes Viral Without Having to Pay For It

Tesla Motors Inc (NASDAQ:TSLA) has, with little doubt, a good thing going right now. And it only took 10 years. Tongue-in-cheek aside (knowing that building a car company is  very difficult, must less to have it still around after 10 years, much less to make it profitable within that time frame), the story of Tesla Motors is a remarkable one, and it may be the kind of story that shines a light on the evolution and transformation of the consumer market nowadays.

Tesla Motors Inc (TSLA)Billionaire Elon Musk, the CEO of Tesla Motors Inc (NASDAQ:TSLA) – who made a lot of his money through building companies like Space X and PayPal – had developed a very different business model for Tesla, one that has the entire auto industry not only taking notice, but is flipping it onto its head.

The auto dealership lobbyists have never been so busy, it seems. In at least two states now, Tesla cars are not allowed to be sold to residents of those states (North Carolina and Texas) without a dealership as an intermediary. And there are other states considering similar legislation.

Why would this be such a big deal surrounding a company that is only projected to sell about 20,000 cars this year? Well, it seems that Elon Musk knows the art of word-of-mouth advertising and believes in being consumer-friendly, allowing car-buyers to purchase  a vehicle the same way they would buy shoes or shirts or a toy for their child at Christmas: online, without sales people or having to pay for a brick-and-mortar building and the showroom vehicles.

Tesla Motors Inc (NASDAQ:TSLA) is all about word-of-mouth. That is how the company has become an overnight phenomenon without doing nearly the amount of print and TV advertising that competitors like Nissan and Ford Motor Company (NYSE:F) spend. Now, we will be among the first to admit that the world-of-mouth advertising didn’t go viral overnight; it was a building process, but Musk has worked wonders through social media outlets including Twitter, where he has more than 225,000 followers. Only the handful of stores and social media have been the catalyst for the growing popularity of the company and the stock.

Said Tesla Motors Inc (NASDAQ:TSLA) spokeswoman Alexis Georgeson, Tesla has no immediate plans for paid advertising, because it hasn’t needed it to this point. “Right now, the stores are our advertising. We’re very confident we can sell 20,000-plus cars a year—without paid advertising. It may be something we’ll do years down the road. But it’s certainly not something we feel is crucial for sales right now,” she said.

So how is it that this buzz is generated so well, and the stock price has tripled this year?

Jeremy Anwyl of said that it’s Musk’s use of social media and the way he plays the Tesla Motors Inc (NASDAQ:TSLA) story to the auto and general media that has  generated much of the free advertising and PR. “They’re selling very few cars when you think about it — but they are getting an awful lot of buzz. You have to credit [Musk], who’s very Steve Jobs-like in how he deals with the media. A lot of the attention is not generated through what we consider traditional advertising. It’s really through social media.”

What are your thoughts about Tesla Moors Inc (NASDAQ:TSLA)? Is this stock and this company for real, or  do you think it is inflated by the PR and hype and see this as a bubble? Give us your feedback in the comments section below.


DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.