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Tesla brand loyalty dips below industry average for the first time as it heads to less than 20% market share

This Model 3 silver color was offered for free to boost sales in China (image: Tesla)
This Model 3 silver color was offered for free to boost sales in China (image: Tesla)
In a double whammy of concerning news about future demand for Tesla vehicles, both their market share and their owners' brand loyalty have started to go down. The share of Tesla owners who expressed satisfaction with their car and will order from the brand again, for instance, went below the industry average for the first time.

The new S&P Global Mobility report pegs Tesla with 65% of all electric vehicle registrations in the US for the third quarter, a 6% drop from the same period last year or 14% from 2021. With the advent of newer electric vehicle models from legacy automakers and pure electric players alike, the S&P projections are for Tesla's market share to slip below 20% by 2025. That's the year that most legacy car brands have pegged as critical for their transition to the EV era, with multiple models from every major manufacturers coming on the market.

In another concerning for Tesla report, the share of its cars' owners who would buy from the company again has now slipped to 60%, down from 70% before, and below the industry average of 65%. That's the first time that the research firm HundredX is registering such a drop in Tesla brand loyalty. According to Rob Pace, its founder and CEO: "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."

While Tesla will aim to shake things up with its first electric Cybertruck pickup release next year, for which it has already amassed about US$100 billion worth of preorders, there are other such vehicles on the market already, while the segment may begin to get crowded just by the time the Cybertruck enters mass production towards the tail end of 2023.

Tesla's more affordable vehicles are still selling in impressive numbers and the Model Y, in particular, may soon become the world's bestselling vehicle ever, knocking some Toyotas off their perch. There are signs that demand is softening, though, as Tesla had to cut the Model 3 and Model Y prices in China and offer incentives not long ago. Moreover, while Tesla is still selling every vehicle it makes, the wait times have been shrinking due to a combination of more tepid demand and factory capacity upgrades.

Other EV makers have especially been chipping away at Tesla's market share at the lower end of the market where Tesla's vaporware Model 2 is only now entering the planning stage. While the Model 2 production costs were tipped by Elon Musk to be half of those of the Models 3, Tesla's sub-$50,000 vehicle trims right now are few and far between.

"Tesla’s position is changing as new, more affordable options arrive, offering equal or better technology and production build," reports S&P. Still, the storied research shop says that while Tesla's market share may shrink drastically due to the veritable onslaught of other brands and models two years from now, the overall EV pie will be much larger, so Tesla's sales in absolute numbers will continue to grow for the foreseeable future.

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> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2022 11 > Tesla brand loyalty dips below industry average for the first time as it heads to less than 20% market share
Daniel Zlatev, 2022-11-30 (Update: 2022-11-30)