By Chris Kirkham
LOS ANGELES, August 4 (Reuters) -Tesla for years had extra repeat U.S. clients than another main automotive model however its loyalty has plunged since CEO Elon Musk endorsed President Donald Trump final summer season, in response to knowledge from analysis agency S&P International Mobility shared solely with Reuters.
The information, which has not been beforehand reported, exhibits Tesla’s buyer loyalty peaked in June 2024, when 73% of Tesla-owning households available in the market for a brand new automobile purchased one other Tesla, in response to an S&P evaluation of vehicle-registration knowledge in all 50 states.
That industry-leading model loyalty price began to nosedive in July, that knowledge confirmed, when Musk endorsed Trump following an assassination try in Pennsylvania on the Republican nominee.
The speed bottomed out at 49.9% final March, slightly below the {industry} common, after Musk launched Trump’s budget-slashing Division of Authorities Effectivity in January and began firing hundreds of presidency staff.
Tesla’s U.S. loyalty price has since ticked again as much as 57.4% in Might, the latest month the S&P knowledge is offered, placing it again above the {industry} common and about the identical as Toyota however behind Chevrolet and Ford.
S&P analyst Tom Libby known as it “unprecedented” to see the runaway chief in buyer loyalty fall so rapidly to industry-average ranges. “I’ve by no means seen this fast of a decline in such a brief time frame,” he mentioned.
Tesla and Musk didn’t reply to requests for remark.
The timing of Tesla’s plunging model loyalty suggests the CEO’s involvement in politics turned off clients within the EV pioneer’s eco-conscious buyer base, some analysts mentioned. “If they’ve Democratic leanings, then maybe they contemplate different manufacturers along with Tesla,” mentioned Seth Goldstein, an analyst at Morningstar.
Tesla’s ageing mannequin lineup additionally faces stiffer competitors from an array of EVs from legacy automakers together with Basic Motors, Hyundai and BMW. The one new mannequin Tesla has launched since 2020, its triangular Cybertruck, has proved a flop regardless of Musk’s prediction of lots of of hundreds of annual gross sales.
On an April earnings name, Tesla CFO Vaibhav Taneja singled out “the unfavorable affect of vandalism and unwarranted hostility in direction of our model and folks,” but in addition mentioned there have been “a number of weeks of misplaced manufacturing” when the corporate retooled factories to provide a refreshed model of its top-selling Mannequin Y.
Musk on the April name mentioned that “absent macro points, we do not see any discount in demand.”
Tesla car gross sales total are falling globally and have declined 8% in the USA the primary 5 months of 2025, in response to S&P. Gross sales fell 33% over the primary six months of the yr in Europe, the place public backlash to Musk’s politicking has been significantly fierce.
Musk’s elevated political activism was “very unhealthy timing” for Tesla, mentioned Garrett Nelson, an analyst who tracks the EV maker at CFRA Analysis, as a result of it got here precisely as the corporate confronted heightened competitors from Chinese language EV makers and different conventional automakers. He mentioned his high considerations for Tesla are its lack of market share and “what may be executed to restore the model harm.”
LOYALTY NOSEDIVE
Tesla stays the U.S. electric-vehicle gross sales chief however has seen its dominance erode as Musk final yr delved into politics and centered Tesla extra on growing self-driving expertise than on new reasonably priced fashions for human drivers.
Buyer loyalty is a carefully watched auto-industry metric as a result of it’s “way more costly” to take new clients from rivals than to retain current ones, mentioned S&P’s Libby.
S&P affords among the most detailed {industry} knowledge on automotive purchases as a result of it analyzes car registration knowledge from all 50 states on a household-by-household foundation. In contrast to survey knowledge, it follows precise car transactions to trace how customers migrate amongst manufacturers and fashions.
From the fourth quarter of 2021 by means of the third quarter of final yr, greater than 60% of Tesla-owning households purchased one other one for his or her subsequent automobile buy, the information present. Just one different model – Ford – posted a quarterly loyalty price exceeding 60% throughout the interval, and solely as soon as.
CUSTOMER DEFECTIONS
S&P’s knowledge additionally examines one other side of the automotive market: Which manufacturers and fashions are taking clients away from others, and which of them are shedding them?
Till not too long ago, Tesla was in a special stratosphere than different automotive manufacturers on this metric. For the 4 years previous to July 2024, Tesla, on common, acquired practically 5 new households for each one it misplaced to a different model.
No different model from a significant automaker was even shut: Hyundai’s luxurious Genesis model was the following greatest, buying on common 2.8 households for each one it misplaced, adopted by Kia and Hyundai, which acquired on common 1.5 and 1.4 households, respectively, for each one they misplaced. Ford, Toyota and Honda misplaced extra households on common than they gained throughout that interval.
Tesla’s common influx of shoppers began to say no in July 2024 together with its loyalty price. Since February, Tesla has been gaining fewer than two households for each one it loses to the remainder of the {industry}, its lowest stage ever, in response to the information.
“The information exhibits clearly that the online migration to Tesla is slowing,” Libby mentioned.
Manufacturers that now appeal to extra Tesla clients than they lose to Tesla embody Rivian, Polestar, Porsche and Cadillac, the information present.
Brian Mulberry, shopper portfolio supervisor at Tesla investor Zacks Funding Administration, mentioned he isn’t involved about Tesla’s long-term earnings as a result of he expects huge earnings from its plans to function robotaxis and license self-driving expertise to different automakers.
Tesla launched a small check of robotaxis in Austin in June, giving rides to hand-picked followers and Web personalities however the service isn’t accessible to most people. If Tesla succeeds in increasing the expertise, Mulberry mentioned, “there’s a case to be made that Tesla doesn’t have to promote vehicles and vans anymore.”
(Reporting by Chris Kirkham in Los Angeles. Modifying by Brian Thevenot and Michael Learmonth.)
