Interest in purchasing Tesla vehicles within the United States appears to be on a decline, a trend partly attributed to the controversial nature of CEO Elon Musk, as revealed by a Caliber survey.
Despite Tesla achieving substantial sales growth in the previous year through significant price reductions, projections suggest a forthcoming report might indicate a slump in quarterly sales.
Caliber’s exclusive data shared with Reuters shows Tesla’s “consideration score” plummeting to 31% in February from a peak of 70% in November 2021, marking a significant decrease, including an 8-point drop from January alone.
This contrasts with slight increases for brands like Mercedes, BMW, and Audi during the same timeframe.
Tesla has not commented on these findings.
However, Musk previously cited high-interest rates as a deterrent to consumer demand for expensive items, such as vehicles.
The strong link between Tesla’s image and Musk’s personal reputation is believed to be a contributing factor to this downturn, with Caliber CEO Shahar Silbershatz noting, “It’s very likely that Musk himself is contributing to the reputational downfall,” highlighting that 83% of Americans associate Musk directly with Tesla.
Controversies surrounding Musk’s political statements and actions are believed to adversely affect Tesla’s brand and demand, as observed by experts in marketing, polling, and the automotive industry.
Challenges such as economic uncertainties, a lack of new affordable models, and increasing competition, notably from Chinese manufacturer BYD, are additional pressures identified by analysts.
Despite a forecasted 15% increase in U.S. electric vehicle sales, Tesla’s growth is estimated at only 3%, indicating a potential shift in the market dynamics primarily affecting Tesla.
Tesla’s market performance has seen a downturn, with vehicle registrations in California, its largest U.S. market, declining for the first time in over three years during the last quarter of 2023.
This period also saw a decrease in Tesla’s stock value and lowered target prices from analysts due to anticipated poor delivery results.
Musk’s personality, once a boon for Tesla’s image as an innovative climate change combatant, now faces scrutiny due to his controversial political endorsements and statements.
Despite Musk’s defense of his popularity and the quality of Tesla vehicles, brand valuation studies and consumer surveys indicate a growing unfavorability towards Musk, affecting Tesla’s brand reputation across several countries, though not in China or Germany.
The shift in consumer sentiment is reflected in individuals like Jonny Page, who opts against purchasing a Tesla due to safety concerns and Musk’s behavior.
Yet, Tesla continues to enjoy a solid base of loyal customers, with some owners expressing indifference towards Musk’s actions.
Others, like climate activist Kat Beyer, feel compelled to choose Tesla despite reservations about Musk’s political affiliations, highlighting the dilemma of prioritizing environmental considerations over personal values.