Tesla's brand loyalty collapsed after Elon Musk backed Trump, data shows
The data, which has not been previously reported, shows Tesla's customer loyalty peaked in June 2024, when 73% of Tesla-owning households in the market for a new car bought another Tesla, according to an S&P analysis of vehicle-registration data in all 50 states.
That industry-leading brand loyalty rate started to nosedive in July, that data showed, when Musk endorsed Trump following an assassination attempt in Pennsylvania on the Republican nominee.
The rate bottomed out at 49.9% last March, just below the industry average, after Musk launched Trump's budget-slashing Department of Government Efficiency in January and started firing thousands of government workers.
Tesla's U.S. loyalty rate has since ticked back up to 57.4% in May, the most recent month the S&P data is available, putting it back above the industry average and about the same as Toyota but behind Chevrolet and Ford.
S&P analyst Tom Libby called it "unprecedented" to see the runaway leader in customer loyalty fall so quickly to industry-average levels. "I've never seen this rapid of a decline in such a short period of time," he said.
Tesla and Musk did not respond to requests for comment.
The timing of Tesla's plunging brand loyalty suggests the CEO's involvement in politics turned off customers in the EV pioneer's eco-conscious customer base, some analysts said. "If they have Democratic leanings, then perhaps they consider other brands in addition to Tesla," said Seth Goldstein, an analyst at Morningstar.
Tesla's aging model lineup also faces stiffer competition from an array of EVs from legacy automakers including General Motors, Hyundai and BMW. The only new model Tesla has released since 2020, its triangular Cybertruck, has proved a flop despite Musk's prediction of hundreds of thousands of annual sales.
On an April earnings call, Tesla CFO Vaibhav Taneja singled out "the negative impact of vandalism and unwarranted hostility towards our brand and people," but also said there were "several weeks of lost production" when the company retooled factories to produce a refreshed version of its top-selling Model Y.
Musk on the April call said that "absent macro issues, we don't see any reduction in demand."
Tesla vehicle sales overall are falling globally and have declined 8% in the United States the first five months of 2025, according to S&P. Sales fell 33% over the first six months of the year in Europe, where public backlash to Musk's politicking has been particularly fierce.
Musk's increased political activism was "very bad timing" for Tesla, said Garrett Nelson, an analyst who tracks the EV maker at CFRA Research, because it came exactly as the company faced heightened competition from Chinese EV makers and other traditional automakers. He said his top concerns for Tesla are its loss of market share and "what can be done to repair the brand damage."
Tesla remains the U.S. electric-vehicle sales leader but has seen its dominance erode as Musk last year delved into politics and focused Tesla more on developing self-driving technology than on new affordable models for human drivers.
Customer loyalty is a closely watched auto-industry metric because it is 'much more expensive' to take new customers from competitors than to retain existing ones, said S&P's Libby.
S&P offers some of the most detailed industry data on automotive purchases because it analyses vehicle registration data from all 50 states on a household-by-household basis. Unlike survey data, it follows actual vehicle transactions to track how consumers migrate among brands and models.
From the fourth quarter of 2021 through the third quarter of last year, more than 60% of Tesla-owning households bought another one for their next car purchase, the data show. Only one other brand – Ford – posted a quarterly loyalty rate exceeding 60% during the period, and only once.
S&P's data also examines another aspect of the automotive market: Which brands and models are taking customers away from others, and which ones are losing them?
Until recently, Tesla was in a different stratosphere than other automotive brands on this metric. For the four years prior to July 2024, Tesla, on average, acquired nearly five new households for every one it lost to another brand.
No other brand from a major automaker was even close: Hyundai's luxury Genesis brand was the next best, acquiring on average 2.8 households for every one it lost, followed by Kia and Hyundai, which acquired on average 1.5 and 1.4 households, respectively, for every one they lost. Ford, Toyota and Honda lost more households on average than they gained during that period.
Tesla's average inflow of customers started to decline in July 2024 along with its loyalty rate. Since February, Tesla has been gaining fewer than two households for every one it loses to the rest of the industry, its lowest level ever, according to the data.
'The data shows clearly that the net migration to Tesla is slowing,' Libby said.
Brands that now attract more Tesla customers than they lose to Tesla include Rivian, Polestar, Porsche and Cadillac, the data show.
Brian Mulberry, client portfolio manager at Tesla investor Zacks Investment Management, said he isn't concerned about Tesla's long-term earnings because he expects enormous profits from its plans to operate robotaxis and license self-driving technology to other automakers.
Tesla launched a small test of robotaxis in Austin in June, giving rides to hand-picked fans and Internet personalities but the service isn't available to the general public. If Tesla succeeds in expanding the technology, Mulberry said, 'there's a case to be made that Tesla doesn't need to sell cars and trucks anymore.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Today
18 minutes ago
- India Today
Sabka boss doesn't like India's rise: Rajnath Singh's swipe at Trump over tariffs
Defence Minister Rajnath Singh on Monday took a sharp swipe at US President Donald Trump over the steep tariff threats to India, saying that the US administration, which he referred to as the 'Sabhata boss,' does not welcome India's rise as a global power."There are some people who are not happy with the speed at which India is developing. They are not liking it. 'Sabke boss toh hum hain', how is India growing at such a fast pace?," the Defence Minister many are trying to ensure that products made in India, by Indian hands, become more expensive than those made in other countries, so that when prices rise, the world will stop buying them. This effort is underway. But India is advancing so rapidly that I say with full confidence: no power in the world can now stop India from becoming a major global power," the minister affirmed. Trump recently imposed a 25 per cent tariff on Indian imports, along with an additional 25 per cent penalty in response to New Delhi's continued purchase of Russian oil. The US President also threatened further tariff hikes, demanding that India halt its deals with Russia. He even dismissed India's economy as 'dead,' while his close aides accused New Delhi of financing Russia's war in Singh noted that defence exports have not been affected by the current situation and are continuously increasing. "As far as the defence sector is concerned, you will be happy to know that now we are exporting defence items worth more than 24 thousand crore. This is the strength of India, this is the new defence sector of the new India and the export is increasing continuously," he has strongly responded to the Trump administration's tariff announcements, describing the US measures as 'unfair, unjustified, and unreasonable,' and reaffirmed that it will 'take all necessary actions' to protect its national its energy ties with Russia, the government stated that crude oil imports are driven by market dynamics and aimed at ensuring the energy security of India's 1.4 billion citizens. It also highlighted that several other countries engage in similar procurement to safeguard their national interests and expressed disappointment at being singled out on this issue."We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India. It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest," the government said earlier. - Ends
Economic Times
20 minutes ago
- Economic Times
US Air Force eyes ‘apocalypse-proof' Tesla Cybertrucks; here's why
Synopsis The US Air Force plans to acquire two Tesla Cybertrucks to serve as missile targets during precision testing, driven by concerns that adversaries might adopt similar vehicles. The Cybertruck's unique design, stainless steel exoskeleton, and advanced electrical system make it a relevant training target. This acquisition is linked to SOCOM's missile program, aiming to simulate real-world scenarios. Agencies Elon Musk's Tesla Cybertruck The US Air Force is looking to acquire two Tesla Cybertrucks — not for transportation, but to use as missile targets during precision testing and to contracting documents reviewed by The War Zone, the Air Force Test Centre (AFTC) wants the vehicles because of the possibility that 'unspecified adversaries' could deploy similar models in the near future. The Cybertrucks are part of a larger order of 33 target vehicles to be delivered to the White Sands Missile Range in New Mexico, alongside sedans, pickups, SUVs, and bongo trucks, though without specific brand requirements for other types.'Market research was conducted to assess the competition for the Tesla Cybertruck by evaluating its design, materials, impact resistance, and innovative technologies,' the document stated. 'The study revealed that the Cybertruck's aggressively angular and futuristic design, paired with its unpainted stainless steel exoskeleton, sets it apart from competitors typically using painted steel or aluminium bodies.' The Air Force's contract specifications note that the Cybertrucks need not be in working condition but must be capable of being roll-towed. They should be delivered with all fluids document explains that the service 'intends to use specific Tesla-manufactured vehicles for target vehicle training flight test events. In the operating theatre, it is likely the type of vehicles used by the enemy may transition to Tesla Cyber trucks [sic] as they have been found not to receive the normal extent of damage expected upon major impact. Testing needs to mirror real-world situations. The intent of the training is to prep the units for operations by simulating scenarios as closely as possible to the real-world situations.'It also cites the vehicle's electrical system: 'Additionally, its 48V electrical architecture provides superior power and efficiency, a feature that rivals are only beginning to develop. Extensive internet searches and industry outreach by [redacted] found no vehicles with features comparable to those of the Cybertruck.'The request is linked to the US Special Operations Command's (SOCOM) Stand Off Precision Guided Munitions (SOPGM) program, which includes air-launched missiles such as the AGM-114 Hellfire and the GBU-69/B Small Glide Munition. Tesla's Cybertruck, touted by CEO Elon Musk as 'apocalypse-proof' and known for its bullet-resistant stainless steel design, has attracted both praise and criticism since its release. Despite its $80,000 price tag, it has faced recalls, quality concerns, and slowing sales.
Mint
an hour ago
- Mint
Indian stock market: Nifty 50 slides 7% from record high— will Trump's tariffs trigger a 10%+ fall?
Indian stock market: The threat of steep tariffs imposed by US President Donald Trump on Indian imports cannot be overlooked. The 50 per cent tariff on India is higher than that on several of its export rivals—20 per cent for Bangladesh and Vietnam, and 30 per cent for China. Despite assessments that Trump's tariffs will have a manageable impact on the Indian economy and hopes that India will be able to strike a deal with the US in the near future, the fact is that exports from sectors such as gems and jewellery, textiles, and certain food items have come to a grinding halt. The Indian stock market is still uncertain, trying to discount the impact of tariffs. However, more than the tariff itself, the biggest risk for the market is Trump's unpredictability. The Nifty 50 has fallen nearly 4 per cent in the last one month, primarily due to tariff-related concerns. Experts expect the domestic market to remain under pressure in the near term due to Trump's tariffs, elevated valuations and unimpressive earnings. They believe the market may see another 5 per cent fall. "If US tariffs on Indian imports remain at 50 per cent, the Nifty 50 could see a cumulative drop of over 10 per cent from its peak, given the current valuations," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. "In India, the major concern remains the quality of corporate earnings. Even now, the market is trading at more than 21 times estimated FY26 earnings. With other global markets looking far cheaper, FIIs may continue selling Indian equities," Vijayakumar added. The 50 per cent tariff rate has made exports from India to the US practically unviable, which will significantly impact the domestic economy. According to Bloomberg Economics estimates, the cumulative tariffs could cut exports to the US by 60 per cent and shrink India's GDP by about 1 per cent. Trump's tariffs are expected to stoke inflation in the US in the coming months, which can push the US Federal Reserve to keep interest rates at elevated levels. This could create a situation of slowing growth amid rising inflation or stagflation. Such a condition will affect foreign capital movement in emerging markets like India. The average US tariff is around 18 per cent—ranging from a low of 10 per cent for the UK to as high as 50 per cent for Brazil and India. Experts believe at least 10 per cent of these tariffs will be passed on to consumers, which will raise inflationary pressure. Vijayakumar believes that the US GDP growth rate in 2025 will be a story of two halves. In the first half, particularly after the April 2 'reciprocal tariffs,' there was a huge frontloading of imports into the US, which sharply increased inventories. This pushed GDP growth into respectable territory for the first half. That is unlikely to happen in the second half, Vijayakumar said. Vijayakumar underscored that imports will fall, and whatever imports do take place will be subject to tariffs, which will be passed on to consumers. This will create a double whammy of a slowing economy and rising inflation—commonly known as stagflation. "In such an inflationary environment, Fed Chair Jerome Powell is unlikely to cut interest rates. While the consensus currently points to a 25-basis-point cut in September, this is improbable as incoming data could deteriorate further. A global slowdown, a US slowdown, and higher US inflation are all possible," said Vijayakumar. A global economic slowdown and the return of inflationary pressure could mean the market remains subdued for a longer period. A lot will also depend on how the bond market behaves amid the evolving situation and incoming data. After the April 2 reciprocal tariffs announcement, the US bond yields saw sharp spikes. Many experts saw rising yields as one of the key reasons why Trump announced a 90-day pause on tariffs and agreed to negotiations. It is quite possible that China could sell part of its US bond holdings if it fails to secure a favourable deal with the US before the August 12 deadline. This could impact the US bond market. Experts believe Trump's tariff tantrums may last for a year or so, till the mid-term elections. "In 2026, the US will hold mid-term elections for the House of Representatives and the Senate, and given the sharp fall in Trump's popularity—likely to worsen due to rising inflation—he may lose his majority. If that happens, his ability to impose trade measures freely could be curtailed," said Vijayakumar. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
