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Tesla owners are more likely to buy another Tesla than owners of any other vehicle brand are likely to buy another model from the brand they are driving. That has been the case for a long time in the USA, and it continued to be the case in the first half of 2024.
As an owner of a Tesla Model 3 for 5 years, I think I can speak a little bit to the appeal of getting another Tesla. First of all, Tesla just makes really nice vehicles that driver superbly, have clean minimalist interiors but with extremely comfy seats, offer the easiest charging in the world, and come with nice occasional updates to the infotainment system. Also, when it comes time to buy, I think there’s a matter that shouldn’t be overlooked. People hate going to a car dealership, getting pushed to add one more thing and one more thing and so on and so on, waiting around for the financing guy to get some “answers” on what’s possible for you, and then feeling like they’re getting scammed. Tesla makes it simple and easy — here’s the price, and it takes 5 minutes to complete the purchase. I’m very tempted if I buy another car to buy a Hyundai or Kia EV, but I don’t want to go back through the dealership experience. So, there’s the draw of buying another Tesla or the quite new draw (for me) of buying the Rivian R3.
But let’s get back to the market research.
While overall brand loyalty in the auto industry was 52.5% in the first half of 2024 (which is 1.9 percentage points more than the same period the year before), Tesla’s brand loyalty was far above that at 67.8%. No other brand has a loyalty rate above 60%. “While all Tesla models retain more than 60% of their previous owners, the Model 3 remains the leader in the brand’s lineup with a loyalty rate of 72.1%.” I think I’ll expound on that, but will think about it more and do so in my coming 5-year review of the Tesla Model 3 SR+.
For now, here’s the best guess from one of S&P Global Mobility’s analysts: “Tesla has historically been a brand with strong loyal ties among their consumer base, despite a limited product portfolio,” said Vince Palomarez, associate director, loyalty product management at S&P Global Mobility. “Changes in BEV prioritization among other OEMs, alog with Tesla’s directive to cut pricing when needed, has kept households from defecting.”
Of course, the first half of 2024 came before Elon Musk endorsed Donald Trump for president, and as he’s gotten more and more political, one has to wonder what effect this is going to have on Tesla’s brand. Many of us have heard many Tesla owners say they’ll never buy another one again. We’ll see. In the meantime, though, it should be noted that Tesla brand loyalty did decline year over year, even as the rest of the industry saw a rise in brand loyalty.
Just to close, I would also note that consumer choice must play a strong role in brand loyalty as well. There are similar cars, SUVs, and trucks from dozens of brands with slight variations in design or specs. However, in terms of electric vehicles, there still aren’t a lot of choices, so when you are on the market for one, there’s less opportunity to jump around from one model or brand to another to sample someone else’s lobby snacks (which, by the way, is one benefit of conventional dealerships that Tesla doesn’t offer, just to be fair to traditional auto dealers here).
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