Tesla may be losing EV market share — but it's still winning over converts from other brands

A Tesla home charging
Tesla trumped all other automakers in terms of overall brand loyalty and most improved loyalty last year, according to S&P Global Mobility.Tesla
  • Tesla trumped all other automakers in terms of overall brand loyalty in a recent study.

  • It shows that despite the EV-maker's many controversies, current fans remain loyal.

  • Still, as other automakers go electric, Tesla might not keep its lead forever.

Tesla has been able to keep a loyal fanbase, but some say Elon Musk might not keep his lead forever.

Tesla trumped all other automakers in terms of overall brand loyalty (beating out Ford) and most improved loyalty (unseating Genesis) last year, according to a loyalty study out of S&P Global Mobility. Tesla also won segment model loyalty awards, including luxury small utility for the Model Y, and luxury small car, for the Model 3.

Tesla also, for another year, won awards for the top "conquest" percentage — or when a brand pulls a customer away from another brand — and highest loyalty among owners of electric vehicles.

S&P Global Mobility analyzed 11.7 million new vehicle registrations in the US throughout 2022 and weighed when a customer acquired a new vehicle of the same make, model, or manufacturer as a vehicle they had already owned.

Tesla's success in 2022 was largely driven by inventory challenges among the traditional automakers, Tesla customers returning to market faster than the average buyer of other brands, and its many advantages as the EV market front-runner. S&P Global Mobility said the brand's resonance with ethnic consumers also drove loyalty improvement, and the company beginning to qualify for crucial EV tax credits in the US again spurred interest.

The results show that despite Musk's controversial way of doing things, volatility impacting the electric-vehicle maker, federal investigations, Twitter distractions, self-driving tech problems, and more, owners and fans are largely committed no matter what.

Still, that might only go so far as Tesla loses EV market share. Tesla held 65.4% of the EV market in 2022, according to Experian. That is down from 68.2% in 2021 and 79.4% in 2020.

Tesla lost ground with some of its customers due to sweeping price cuts that meant the value of brand-new Teslas dropped by as much as 20% overnight.

The cuts were an effort to boost waning demand, per a recent J.D. Power EV Index. But those cuts worked to snag attention from other buyers; consideration of the brand, which saw just 39% of EV shoppers indicating interest in December, shot back up to 44% in January.

Tesla and Musk could be playing a role in alienating prospective buyers, but that's not all. More legacy automakers and startups are racing to get new EV products to the market.

"Down the road, this hold that Tesla has may not be as strong, but in the short term, they have built that up, because they have the infrastructure, they have the brand recognition," Vince Palomarez, product management principal at S&P Global Mobility, said. "While Tesla will still have that hold on their buyers, I don't think it will be as dominating going forward.

"Based off what we're seeing for future production plans," he added, "I do expect there to be some kind of erosion to Tesla's share."

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