Tesla enjoys the highest brand loyalty among US automakers, Citi analysts concluded early this year. While the brand continues to bask in a high loyalty rate, its rivals are luring a small percentage of its buyers, wrote S&P Global Mobility in its recent report.
Among electric compact utility vehicles, the Tesla Model Y has a 37.3 percent loyalty rate, while the Ford Mustang Mach-E is second at 18.5 percent. While 70.5 percent of Model Y owners buy another EV, the rest of them defect to gas-powered SUVs and trucks, S&P reported. That’s partially due to the large gulf in pricing between the Model Y, and Tesla’s luxury EVs: Model S and Model X.
The Model Y Long Range currently starts at $50,490 before taxes, fees, and incentives after Tesla removed the lower-priced standard range variant from its online configurator. The Model S starts at $74,990, while the Model X’s starting price is nearly $80,000 before taxes and fees.
The upcoming Cybertruck could potentially plug this gap. After Ford slashed the prices of the F-150 Lightning in July 2023 to a starting MSRP of just under $50,000, CEO Elon Musk tweeted that it was still “somewhat expensive,” hinting that the Cybertruck might undercut Ford’s electric truck.
Some Model S buyers also defect to non-Tesla vehicles. The luxury electric sedan is now over a decade old, and loyalty rates naturally decline when a vehicle ages, as per the report. 3.4 percent of Model S buyers switch to the Lucid Air, followed by the Rivian R1T at 1.8 percent, Mercedes-Benz EQS at 1.6 percent and Rivian R1S at 1.2 percent.
Remember that these are small migration numbers. On a larger scale, Tesla continues to rule to roost. Nearly 60 percent of Model S owners purchase another Tesla, while a whopping 72.8 percent of Model 3 owners also return to the brand. In fact, Tesla appears to be gaining many more customers than it is losing.
A previous S&P study stated that 28.6 percent of Tesla buyers switch directly from legacy carmakers like Honda and Toyota. That said, the latest study is based on 12-month rolling data through June 2023, and might not be applicable to older buyers.