Tesla has seen a dramatic decline in interest from its customer base, with new data showing a huge drop in support following Elon Musk’s alignment with President Donald Trump.
Customer retention fell from a 73 per cent repeat-buyer rate to just 49.9 per cent in the months after CEO Elon Musk became more politically engaged.
The electric vehicle manufacturer held the top position for brand loyalty among major car companies until June 2024, when nearly three-quarters of Tesla owners chose to purchase another Tesla vehicle.
This dominance began crumbling in July when Musk publicly backed. The decline accelerated dramatically following Musk’s appointment to lead Trump’s Department of Government Efficiency (DOGE) in January, where he initiated mass redundancies of federal employees.
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The perception of Tesla as a brand has been battered by Musk’s affiliation with President Donald Trump
By March, Tesla’s retention rate had fallen below the automotive sector average, marking what industry experts describe as an unparalleled collapse in brand allegiance.
S&P Global Mobility analyst Tom Libby characterised the speed of this transformation as “unprecedented” in automotive history.
“I’ve never seen this rapid of a decline in such a short period of time. The data shows clearly that the net migration to Tesla is slowing,” he told Reuters.
The research firm’s exclusive data reveals Tesla’s loyalty metrics have partially recovered to 57.4 per cent by May, placing the company marginally above sector averages. This positions Tesla at roughly equivalent levels to Toyota, though trailing both Chevrolet and Ford.
The timing strongly indicates that Musk’s political activities alienated Tesla’s traditionally environmentally-conscious customer base.
Morningstar analyst Seth Goldstein suggested that buyers with progressive political views might now be exploring alternative brands.
During an April investor call, Tesla’s chief financial officer Vaibhav Taneja acknowledged “the negative impact of vandalism and unwarranted hostility towards our brand and people”. However, Musk maintained that “absent macro issues, we don’t see any reduction in demand”.
Tesla’s competitive advantage in attracting customers has evaporated alongside its loyalty crisis. Previously, the company gained nearly five new households for every one lost to competitors, far exceeding any rival manufacturer.
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This remarkable performance has collapsed to fewer than two households gained per loss since February, representing the weakest customer acquisition rate in Tesla’s history.
S&P’s data reveals that several premium brands now successfully poach more Tesla owners than they lose to the electric vehicle pioneer, including Rivian, Polestar, Porsche and Cadillac.
The brand damage has translated into declining sales across Tesla’s key markets as vehicle deliveries dropped eight per cent in the United States during the first five months of 2025, whilst European sales plummeted by 33 per cent in the initial six months of the year.
Europe’s particularly sharp decline reflects intense public opposition to Musk’s political stance and mounting pressure from rivals like General Motors, Hyundai and BMW, all launching competitive electric models.
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The release of the new Model Y has boosted sales in recent months
CFRA Research analyst Garrett Nelson described Musk’s political involvement as “very bad timing,” coinciding with intensified competition from Chinese electric vehicle manufacturers.
Despite the mounting challenges, Tesla awarded Musk 96 million additional shares on Monday, valued at approximately $29billion (£21.8billion). The grant aims to secure the billionaire’s continued leadership whilst he contests a legal ruling that invalidated his previous compensation arrangement.
A Delaware court nullified Musk’s 2018 remuneration package last year, originally worth more than $50billion (£37.6billion), determining that Tesla’s board approval process was fundamentally flawed and disadvantaged shareholders.
Musk initiated an appeal in March, arguing the lower court judge committed numerous legal errors in overturning the record-breaking compensation deal.
