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Tesla Vs GM And Ford In Marketing And Advertising Expenses

automotive manufacturing

Automotive manufacturing. Pixabay Image.

When it comes to the automotive industry, marketing, advertising, and promotional expenses play a crucial role in driving sales and creating brand awareness.

Automotive companies, including Tesla, Ford, and General Motors, allocate a significant portion of their budget to these activities, aiming to differentiate themselves from their competitors and attract potential customers.

Through various marketing and advertising strategies, automotive companies such as Tesla, Ford Motor, and GM try to showcase their products and services’ unique features and benefits.

Additionally, promotional activities such as events, sponsorships, and discounts help create a buzz and generate consumer interest.

In this way, marketing, advertising, and promotional expenses are essential tools for automotive companies to stay relevant and competitive in today’s fast-paced market.

This article explores the marketing, advertising, and promotional expenses of automotive companies such as Tesla, General Motors, and Ford Motor.

Let’s get started!

Please use the table of contents to navigate this page.

Table Of Contents

Overview

O1. Definitions

Marketing, Advertising, And Promotional (MAP) Expenses

A1. Tesla
A2. General Motors And Ford Motor

As A Percentage Of Revenue

B1. MAP Expenses To Total Revenue Ratio

As A Percentage Of Total Costs And Expenses

C1. MAP Expenses To Total Costs And Expenses Ratio

As A Percentage Of SGA Expense

D1. MAP Expenses To SGA Expense Ratio

Summary And Reference

S1. Conclusion
S2. References and Credits
S3. Disclosure

Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Marketing, Advertising, And Promotional Expenses: Marketing, advertising, and promotional expenses refer to the costs incurred by automotive companies in promoting their products and services.

Marketing activities involve creating a brand image, developing marketing strategies, and conducting market research to understand consumer behavior and preferences.

Advertising involves making and disseminating messages about the product or service through various channels such as television, radio, print media, and digital platforms.

On the other hand, promotional activities are short-term tactics used to attract customers and generate sales. These include events, sponsorships, contests, discounts, and other methods.

These expenses are essential in creating brand awareness, driving sales, and maintaining a competitive edge in the automotive industry.

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Tesla

Tesla-marketing-advertising-and-promotional-spending

Tesla-marketing-advertising-and-promotional-spending

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* Tesla’s results from 2019 to 2022 are extrapolated figures based on historical data.
* All companies’ fiscal year begins on Jan 1 and ends on Dec 31.

As shown in the chart above, Tesla spends less than US$100 million annually on marketing, advertising, and promotional expenses.

This figure is relatively small compared to Tesla’s market capitalization of nearly US$1 trillion.

In fiscal 2022, Tesla spent only US$78.9 million on marketing, advertising, and promotional expenses, down 13% over 2021 but up 25% over 2020.

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General Motors And Ford Motor

GM-and-Ford-marketing-advertising-and-promotional-spending

GM-and-Ford-marketing-advertising-and-promotional-spending

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* All companies’ fiscal year begins on Jan 1 and ends on Dec 31.

On the other hand, Ford Motor and General Motors spend considerable expenses on marketing, advertising, and promotional activities, totaling billions of dollars.

Moreover, Ford and GM’s marketing, advertising, and promotional expenses are nearly the same in most fiscal years, suggesting the same level of marketing, advertising, and promotional activities for both automakers.

In fiscal 2022, Ford Motor’s marketing, advertising, and promotional spending of US$2.2 billion was considerably lower than GM’s figure of US$4 billion.

GM’s marketing, advertising, and promotional spending has significantly risen in post-pandemic periods, while Ford’s spending has remained relatively flat.

A noteworthy trend is that Ford and GM’s marketing, advertising, and promotional expenses are significantly higher than Tesla’s spending.

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MAP Expenses To Total Revenue Ratio

marketing-advertising-and-promotional-spending-to-revenue-ratio

marketing-advertising-and-promotional-spending-to-revenue-ratio

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* All companies’ fiscal year begins on Jan 1 and ends on Dec 31.

When we compared the marketing, advertising, and promotional expenses to revenue, Tesla’s results were significantly lower than Ford Motor and General Motors.

For instance, Tesla’s ratio of marketing, advertising, and promotional expenses to revenue came in at only 0.1% in fiscal 2022, the lowest level ever measured since 2014.

On the other hand, GM and Ford Motor allocate about 2.7% and 2.4% of revenue on marketing, advertising, and promotional expenses on average, a much higher ratio than Tesla’s.

An interesting fact is that Ford significantly cut its marketing, advertising, and promotional expenses in fiscal 2022, totaling only 1.4% of revenue in the same period.

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MAP Expenses To Total Costs And Expenses Ratio

marketing-advertising-and-promotional-spending-to-total-costs-and-expenses-ratio

marketing-advertising-and-promotional-spending-to-total-costs-and-expenses-ratio

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* Total costs and expenses include costs of revenue and operating expenses.
* GM and Ford’s total costs and expenses exclude GM Financial and Ford Credit.
* All companies’ fiscal year begins on Jan 1 and ends on Dec 31.

Tesla’s marketing, advertising, and promotional spending make up only a tiny portion of its total costs and expenses.

In this aspect, Tesla’s ratio came in at only 0.1% in fiscal 2022, slightly lower than the 0.2% in 2021 and was the lowest compared to Ford’s and GM’s figures.

In the same period, Ford allocated about 1.5% of its total costs and expenses on marketing, advertising, and promotional spending, while GM’s ratio reached 2.9%, the highest among all automakers in comparison.

A trend worth highlighting is that Ford and Tesla’s ratios have steadily declined since 2014, while GM’s percentage has remained relatively flat for the same period.

Ford has steadily reduced its marketing, advertising, and promotional expenses with respect to the total costs and expenses.

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MAP Expenses To SGA Expense Ratio

marketing-advertising-and-promotional-spending-to-SGA-expenses-ratio

marketing-advertising-and-promotional-spending-to-SGA-expenses-ratio

(click image to expand)

* All companies’ fiscal year begins on Jan 1 and ends on Dec 31.

All automakers’ marketing, advertising, and promotional spending reside within the selling, general, and administrative (SGA) expenses.

Therefore, it is appropriate to measure the automakers’ marketing, advertising, and promotional spending with respect to the SGA expenses.

That said, Tesla’s marketing, advertising, and promotional spending comprised only 2% of its SGA expenses in fiscal 2022, the lowest among all automakers in comparison.

On the other hand, a hefty 37.4% of GM’s SGA expenses was marketing, advertising, and promotional spending, while Ford’s figure came in at 20.2% in fiscal 2022.

GM’s ratio has remained relatively constant, while Ford’s ratio has steadily decreased since 2014.

Ford’s ratio of 20.2% in 2022 was a record low in the past nine years.

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Conclusion

To recap, Tesla spends less than US$100 million on marketing, advertising, and promotional expenses.

On the other hand, Ford and GM spend billions of dollars on marketing, advertising, and promotional expenses.

Ford and GM spend a considerable portion of their SGA expenses on marketing, advertising, and promotional costs, while Tesla’s spending on marketing, advertising, and promotional activities is negligible.

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References and Credits

1. All financial figures presented in this article were obtained and referenced from annual and quarterly reports, investor presentations, SEC filings, earnings reports, press releases, etc., which are available in the following links:

Tesla Investor Relations,
Ford Investor Relations,
GM Sec Filings.

2. Pixabay Images

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Disclosure

References and examples such as tables, charts, and diagrams are constantly reviewed to avoid errors, but we cannot warrant the total correctness of all content.

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

If you find the information in this article helpful, please consider sharing it on social media and providing a link to it from any website to create more articles like this.

Thank you!

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