“The future loyalty data is really, really worrisome if you’re Tesla because it tends to translate into market share six to nine months out,” says Rob Pace, founder and CEO of research firm HundredX. “There are storm clouds.”
Loyalty Slips Below Average in Survey
HundredX has been tracking Tesla via brand loyalty surveys since 2019. The now-Texas-based electric automaker, Pace says, consistently posted the most impressive brand loyalty numbers in the automotive industry. Around 70% of Tesla owners consistently said they planned to purchase from Tesla again when they needed another car.
Now, Pace says, the number has begun to fall rapidly. In HundredX’s most recent tracking survey, it dipped below 60%. The industry average is around 65%.
Other Surveys Disagree
HundredX’s numbers diverge from better-known polls. S&P Global Mobility may be the industry standard. Its 2022 survey, published in July, found that Tesla had the most loyal buyers in the luxury car market.
But that survey is published annually. HundredX’s results come faster and may suggest problems for Tesla.
Twitter Controversy To Blame?
A recent Bloomberg report blames CEO Elon Musk’s high-profile acquisition of Twitter and the many controversies it fed.
“Musk has overestimated the American public’s appetite for erratic behavior,” Gaurav Sabnis, an associate professor of marketing at the Stevens Institute of Technology, told Bloomberg.
Brand Loyalty Is Key To Tesla’s Growth
Kelley Blue Book parent company Cox Automotive tracks which cars consumers research most often through its quarterly Brand Watch surveys. Its most recent report found that Tesla still dominates the electric vehicle (EV) market share, with 64% of EV shoppers considering a Tesla.
But a year before, that same survey found that 75% of shoppers considered a Tesla. The company’s market share is eroding as more competitors introduce electric cars.
So far, those consideration numbers haven’t resulted in a sales dip. Tesla remains America’s best-selling luxury automaker. Most Tesla shoppers don’t even research other cars.
But those who do are turning elsewhere in greater numbers. In Cox Automotive’s most recent luxury car Brand Watch survey, Tesla consideration slipped significantly.
“The competition is getting stiffer,” says Pace.
We may know more about whether Musk’s Twitter acquisition has damaged Tesla’s once-dominant brand loyalty when fourth-quarter sales results post.
