Even Tesla owners, often seen as the most loyal customers, are trading in their Teslas at record rates, according to a new analysis from Edmunds. The car shopping site's data reveals a significant shift in consumer behavior, with March marking the highest share ever for Tesla trade-ins toward new or used cars from dealerships selling other brands. This jump comes at a time when Tesla’s brand value has been reported as declining and competition in the EV space has sharply increased.
According to Edmunds’ data, consumer demand for new Teslas has dried up. Last month, inventory for new Tesla vehicles on the platform sank to its lowest levels since October 2022. This represents a huge turnaround from the record high levels seen just several months ago in November. The trend is indicative of rising Tesla trade-ins to dealerships that sell other brands, which hit an all-time high in March.
A few different factors are likely driving this change. U.S. Tesla sales were down an estimated 11% year-over-year in January, reported S&P Global Mobility. Meanwhile, established automakers like Ford, Chevrolet, and Volkswagen have been bolstering their EV offerings, gaining market share in the U.S.
Shifts in Tesla consumer sentiment could create an opportunity for legacy automakers and EV startups to gain ground. - Jessica Caldwell, head of insights at Edmunds.
Compounding the troubles, Tesla’s brand value has taken a major hit. Brand Finance, an independent brand valuation and strategy firm, just declared a record-breaking 26% decline in Tesla’s brand value for 2024. This drop represents a $15 billion loss for the company. This is the second year in a row that the company’s brand value has fallen. The Tesla brand is inextricably linked to the person now running the company — CEO Elon Musk.
Edmunds’ data only covers transactions since Elon Musk acquired this White House. It doesn’t apply to any Tesla transactions that occurred prior to then. At the same time, Tesla facilities in the U.S. and internationally have been the sites of regular, repeated protests, sometimes thousands strong. In fact, vandalism and arson have been committed against Tesla stores, vehicles, and charging stations throughout the U.S.
