US Tesla owners swap out EVs at historic rate as brand value drops and competition increases
Tesla owners in the US are trading in their electric vehicles at record levels, according to data released by national car shopping site Edmunds and reported by CNBC.
Edmunds stated that March marked “the highest ever share” it had seen of Tesla trade-ins for new or used vehicles from dealerships selling other brands.
This shift in consumer behaviour comes two months after Tesla CEO Elon Musk assumed a key role in the second Trump administration.
Since arriving in Washington, DC, in January to head the Department of Government Efficiency (DOGE), Musk has overseen cuts to federal staffing and spending and gained access to sensitive US government systems and data.
His actions have faced ongoing legal challenges.
Before taking up the DOGE post, Musk spent around US$290m in 2023 to support Donald Trump’s return to the White House.
According to CNBC, Tesla’s stock has fallen 42 percent this year, despite investor enthusiasm following Trump’s election win in November.
Tesla facilities in the US and abroad have since faced waves of protests, along with reports of vandalism and arson at Tesla stores, charging stations, and vehicles.
Increased competition in the EV market has also impacted Tesla.
In January, S&P Global Mobility reported an 11 percent year-over-year decline in Tesla’s US sales. At the same time, Ford, Chevrolet, and Volkswagen gained market share by increasing their own EV sales.
Jessica Caldwell, head of insights at Edmunds, stated in an email that “shifts in Tesla consumer sentiment could create an opportunity for legacy automakers and EV startups to gain ground.”
She added, “As Tesla brand loyalty and interest wavers, those offering competitive pricing, new technology, or simply less controversy could capture defecting Tesla owners and first-time EV buyers.”
Edmunds found that interest in new Tesla models on its site dropped to its lowest level since October 2022, following a peak in November.
Brand Finance reported that Tesla’s brand value declined by 26 percent in 2024, or about US$15bn, marking a second consecutive annual decrease.
While many Tesla drivers typically trade in their cars for new Tesla models, Edmunds noted that its data did not include those internal brand transactions.
The Edmunds survey also found that, as of August 2024, just 2 percent of US car shoppers were unfamiliar with Musk.
Tesla has not responded to a request for comment.
