Tesla’s brand loyalty dropped from a record high of 73% to just under 50% in less than a year, marking one of the steepest declines in automotive history. By May 2025, the electric car company’s customer retention rate had partially rebounded to 57.4%, but it’s still far below its impressive peak from June 2024.
The dramatic shift began in July 2024 when CEO Elon Musk publicly endorsed former President Donald Trump following a political incident. This endorsement shocked many Tesla owners since Trump had repeatedly criticized electric vehicles and promoted anti-EV policies.
The situation worsened in January 2025 when Musk joined the Department of Government Efficiency, further alienating progressive buyers who’d been Tesla’s core customers. His criticism of the One Big Beautiful Bill Act in June 2025 continued to strain relationships with environmentally-conscious consumers.
S&P Global Mobility tracks these loyalty rates by monitoring vehicle registrations across all 50 states. Their data shows Tesla customers are now switching to competitors at remarkable rates. Rivian and Polestar attract more Tesla defectors than they lose back to Tesla. Luxury brands like Porsche and Cadillac are also winning over premium buyers who once chose Tesla.
In March 2025, Tesla’s loyalty rate hit 49.9%, falling below the industry average for the first time. Ford and Chevrolet now boast higher repeat purchase rates than Tesla. Even Toyota, which matched Tesla’s 57.4% loyalty rate in May, maintains more stable customer retention.
Despite these challenges, some investors remain optimistic. Brian Mulberry from Zacks Investment Research believes Tesla’s robotaxi program and self-driving technology could offset loyalty concerns. The company’s testing self-driving taxis in Austin with select users and plans to license its autonomous driving software to other carmakers.
Tesla built its dominant position through technological innovation and environmental messaging that connected with progressive consumers. The company’s aging model lineup hasn’t seen a successful new release since 2020, with the Cybertruck failing to meet sales expectations. The company consistently outperformed competitors in US sales and achieved the highest Net Promoter Scores in the industry.
However, Musk’s political activities created a direct conflict with many customers’ values, triggering what analysts call a remarkable brand crisis in the automotive sector.