Tesla was once the king of American automotive brand loyalty, with a record 73% of Tesla owners buying another model for their next vehicle as of June 2024, according to a Reuters report published Monday. However, data from research firm S&P Global Mobility cited by the news agency reveals a sharp drop in Tesla sales starting July 2024, right after CEO Elon Musk endorsed President Donald Trump following an assassination attempt on the key Republican member.
By March 2025, Tesla’s loyalty rate had reportedly dipped to 49.9%, just below the industry average. Since then, it rebounded somewhat to 57.4% by May, which is roughly on par with Toyota but behind Chevrolet and Ford, the S&P report said.
S&P analyst Tom Libby called the decline “unprecedented,” telling the US-based news agency, “I’ve never seen this rapid of a decline in such a short period of time.”
Analysts have linked the slump partly to Musk’s political involvement in the last few months, which may have alienated Tesla’s traditionally eco-conscious, Democratic-leaning customer base. “If they have Democratic leanings, then perhaps they consider other brands in addition to Tesla, Reuters quoted Morningstar’s Seth Goldstein as saying.
The brand also appears to be facing rising competition. Since 2020, Tesla hasn’t launched a major new model besides the Cybertruck, which has reportedly struggled commercially despite Musk’s optimistic sales predictions. Meanwhile, rivals like General Motors, Hyundai, and BMW have introduced appealing EV options.
Tesla CFO Vaibhav Taneja recently acknowledged on an April earnings call the impact of “vandalism and unwarranted hostility towards our brand and people,” alongside production delays during factory retooling. “Absent macro issues, we don’t see any reduction in demand,” Musk had said at the time, according to Reuters.
Still, America’s Tesla sales dropped eight percent in the first five months of 2025, and European sales fell 33% in the first half of the year, where backlash to Musk’s style of politics has been especially strong.
CFRA Research analyst Garrett Nelson told Reuters that Musk’s political activism was “very bad timing,” hitting Tesla hard just as the carmarker faced competition from Chinese and traditional automakers.
Losing Customers, Losing Ground
Before July 2024, Tesla was reportedly acquiring nearly five new customer households for every one it lost to competitors. But since then, the automaker has gained fewer than two new households per loss, hitting its lowest point ever, the report said.
Brands attracting more Tesla customers, the report said, included Rivian, Polestar, Porsche and Cadillac.
Despite the setbacks, some investors have expressed optimism suggesting that Tesla’s robotaxi and self-driving tech could be game-changers. Tesla launched a limited robotaxi test in Austin in June, though it’s not yet open to the public.
