Tesla Owners Stay Loyal Through Elon Musk’s Many Controversies
The electric-vehicle brand retained US customers who returned to market for a new car last year.
Elon Musk may have turned off some consumers last year, but Tesla Inc. was no worse for wear in an annual analysis of car brands' US customer retention.
S&P Global Mobility recognized the maker of the Model 3 sedan and Model Y sport utility vehicle on Monday both for overall brand loyalty and most improved loyalty in 2022. Tesla also was a repeat winner of awards for the top conquest percentage and highest loyalty among owners of vehicles with hybrid or electric powertrains.
The market researcher doles out the awards based on its analysis of 11.7 million new-vehicle registrations. S&P Global Mobility tracks US household's vehicle ownership and deems customers loyal when they acquire another new vehicle of the same model, make or manufacturer. When a carmaker lures a consumer away from another brand, it's considered a conquest.
General Motors Co. again won the award for overall loyalty among manufacturers, while Mercedes-Benz was the most-improved make in the alternative-powertrain segment.
The results indicate Tesla largely overcame ill effects that its chief executive officer may have had on the brand last year. Many users, which Musk acquired for $44 billion, swore off the EV brand over the billionaire's countless controversies on and off the social media service.
Tesla has historically enjoyed high loyalty rates with customers, many of whom have become devoted defenders of both Musk and the brand. The discounts and perks Tesla offered to boost sales late last year helped the company finish strong, and its home-charging equipment also has been a powerful retention tool, according to Vince Palomarez, product management principal at S&P Global Mobility.
“I'm not equating Tesla with Apple, but you can see similarities,” Palomarez said. “Someone who's going to be a Tesla family, they're going to have the Model 3, they're going to have a charging station, they're going to come back and get a Model Y, similar to how someone who has an iPhone probably also has an iPad or a MacBook. ”
One area where Tesla is slipping, at least to some degree, is in attracting first-time EV buyers. Historically, more than 70% of US consumers acquiring their first electric car bought a Tesla. “In the last year or two, as more EV models are being introduced, we're starting to see some of that share decline,” Palomarez said.