For years, electric car manufacturer Tesla (TSLA) benefited from its reputation for producing some of the best electric vehicles on the market during a time when the technology was in its infancy.
However, times have changed, technology has evolved, and before long, Tesla is no longer the only competitor in the electric vehicle market.
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Today, competition from well-established automakers like Mercedes-Benz, BMW, Audi, Chevrolet and Ford is chipping away at Tesla's once-competitive advantage at a time when Elon Musk's mind is elsewhere.
Tesla's problem with the competition
According to a new report from JD Power, New technologies and flashy features offered by the wide range of electric vehicles on the market are driving buyers away from Tesla.
In its annual report owner satisfaction studyJD Power found that owners of EVs made by the big, established automakers were more “emotionally satisfied” than Tesla owners. Also, while Teslas benefit from loyal, repeat purchases, buyers who are new to the EV market are more inclined to go for non-Tesla EVs.
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JD Power's findings spell trouble for the Elon Musk-led electric carmaker as they provide a backstory on why its grip on the electric market is weakening.
According Cox Automotive DataTesla’s share of electric car sales has fallen to a new low. In the second quarter of 2024, Tesla’s market share fell to a dizzying 49.7%, marking the first time its share fell below 50% in a quarter.
In the same period in 2023, Tesla's market share was 55%, a disappointing result compared to almost 80% in 2020.
All electric vehicle, none of Elon's baggage
Tesla may have a well-known product line that caters to a select niche audience within the rest of the EV landscape, but the fact is that most EV buyers don't want any of the baggage associated with the Tesla badge.
Tesla is already suffering from an image problem. Data from an April 2024 study by market intelligence firm Caliber showed that many potential Tesla buyers said they had been put off by the brand because of CEO Elon Musk’s highly polarizing online image.
They found that more than 83% of Americans associate Musk with Tesla. As a result, Caliber gave the automaker a consideration score of just 31%, meaning that the majority of EV buyers have an unfavorable opinion of the Tesla brand.
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Musk has publicly supported Republican presidential candidate Donald Trump, but his political leanings were no secret to the millions of users of his social media platform twitter x (formerly known as twitter) long before then.
A recent Poll conducted by the New York Times found that many EV owners associate Tesla with Musk and vice versa and that the racist, xenophobic, transphobic and homophobic views he shares online have influenced their decision to buy EVs from other brands.
Best electric vehicles from trusted brands
While these conditions influence some buyers' decisions, traditional automakers have upped their game and created electric vehicles that feel better to own than Teslas, according to JD Power senior director of auto benchmarking Frank Hanley.
“(Automakers are) rolling out improved vehicles that are more in line with what customers want, including better interior storage and higher-quality materials, as well as ensuring features are easy to use,” Hanley said.
“In the case of electric vehicles (BEVs), recent launches from traditional manufacturers have surpassed perennial leader Tesla when it comes to the level of emotional attachment and enthusiasm of owners with their new vehicle.”
Tesla Inc., trading on the NASDAQ as TSLA, is down 5.09% from the market open at last check, trading at $220.25 at the time of writing.
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