Tesla loyalty and market share soar, but dominance of EV segment could wane

Tesla Motors has not just thrived in the first six months of
2022; it has reached new levels of success based on two metrics –
record-high brand loyalty rates and significant brand loyalty among
Model 3 owners. Tesla brand loyalty (the propensity of
return-to-market Tesla households to acquire another Tesla) has
climbed to 67.5% in the first half of 2022, more than 12 percentage
points higher than its brand loyalty in any preceding year (its
next highest result was 55.2% in 2020). Driving these results is
the Model 3, with a first half 2022 brand loyalty rate of 70.7% –
higher than any other model on the U.S. market. In two of the first
six months of 2022, Tesla’s brand loyalty exceeded 70% (March –
73.1% and June – 72.8%). How does this compare to its luxury
rivals? Tesla’s June loyalty of 67.5% was almost 17 percentage
points ahead of luxury runner-up Mercedes-Benz at 50.7%.

Tesla’s market share results in the first half of 2022 are
equally strong. With 20.5% share of the luxury market, Tesla share
is more than 6 percentage points above that of runner-up BMW.
Tesla’s June 2022 new registration volume of just over 50,000 units
represents the first time in (at least) the last 10 years that a
luxury brand has registered more than 50,000 new vehicles in one
month. In fact, the 40,000 threshold per month has only been
surpassed four times in 10 years – three times by Tesla and once by
BMW.

Tesla’s high loyalty and share results demonstrate a challenging
situation for the rest of the industry. Not only are an
unprecedented number of households acquiring a Tesla, but a high
proportion of these owners are sufficiently happy with their
vehicles to acquire another one.

However, the U.S. luxury landscape is changing, and three
newcomers have shown, in their early days, their ability to
conquest Tesla owners. As the three charts below indicate, the
number one brand conquested by each of Lucid, Polestar, and Rivian
in the first six months of 2022 is Tesla. Moreover, one-third of
Lucid’s conquests, and one-quarter of Rivian’s, are coming from
Tesla owner families, according to the S&P Global Mobility
Household Loyalty Methodology (the newly acquired vehicle may be an
addition to the household fleet.) One key indicator to Lucid and
Rivian conquests: They are competing against the older-sheet metal
vehicles in the Tesla lineup – the Model X and S – at premium price
levels where consumers having the latest trendy item is seen as
essential. Conversely, Polestar is competing against the newer
Model 3 and Y. If these trends continue, these three EV luxury
brands and other newcomers may offer a viable alternative to
Tesla.

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This automotive insight is part of our monthly Top
10 Trends Industry Report.
The Report findings are
taken from new and used registration and loyalty data.

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Posted 09 September 2022 by Tom Libby, Associate Director, Loyalty Solutions and Industry Analysis, S&P Global Mobility


This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.