Tesla, once a leader in the electric vehicle (EV) market, saw its brand value decline by a staggering $15 billion in 2024, marking the second consecutive year of losses. Research and consulting firm Brand Finance revealed that Tesla’s brand is now valued at $43 billion, down from $58.3 billion at the start of last year. This decline represents a 26% drop, positioning Tesla behind competitors like Toyota, whose brand value stands at $64.7 billion, and Mercedes, valued at $53 billion.
Aging Lineup and Leadership Challenges
Brand Finance attributed Tesla’s declining brand value to an aging lineup of vehicles and the controversial leadership of CEO Elon Musk. David Haigh, CEO of Brand Finance, emphasized that while some admire Musk, many are turned off by his public persona and political actions. Musk’s behavior, according to Haigh, has a direct influence on Tesla’s reputation and consumer perception.
“If you are buying electric vehicles, his persona is highly likely to impact your view of whether or not you want to buy one of his company’s cars,” Haigh stated. Tesla’s brand scores on key metrics, such as “consideration,” “reputation,” and “recommendation,” have all declined across major markets, including the U.S., Europe, and Asia.
Declining Scores in Consumer Perception
Tesla’s “consideration” score, which measures whether people would consider buying from a brand, dropped significantly in Europe — from 21% to 16% over the past year. Similarly, its U.S. recommendation score fell from 8.2 out of 10 to just 4.3. Although Tesla retains a high loyalty score of 90% among existing U.S. customers, its ability to attract new buyers appears to be weakening.
Competitors like Mercedes and BYD are outperforming Tesla on consideration and recommendation scores outside the U.S., solidifying their positions in the increasingly competitive EV market.
Sales and Market Share Challenges
Tesla’s declining brand value is mirrored by its sales performance. Deliveries in 2024 fell by about 1% to 1.79 million vehicles, even as global demand for EVs surged. In the U.S., Tesla’s market share dropped from 55% in 2023 to 49% in 2024, according to Cox Automotive.
This market contraction raises concerns about Tesla’s ability to maintain its dominance in the EV sector. Haigh warned that the company’s weakening brand strength could lead to fewer sales and lower profit margins in the future.
Musk’s Controversial Influence
Elon Musk’s political activities and public behavior have also played a significant role in Tesla’s declining brand value. Musk’s support for controversial political figures, including his contributions to Donald Trump’s campaign and his endorsement of Germany’s far-right Alternative for Germany (AfD) party, has alienated some consumers. Furthermore, his public actions, such as using a gesture interpreted as a “Nazi salute” during Trump’s inauguration, have caused widespread backlash.
“Tesla is unique in the tight association between the company’s brand and its leader,” Haigh noted, highlighting the risks of Musk’s polarizing influence on consumer attitudes.
A Warning for Tesla’s Future
Brand Finance’s findings suggest that Tesla’s “pulling power is weakening.” Unless the company introduces a range of innovative new products and mitigates the negative impact of Musk’s behavior, it risks being seen as past its peak. Notably, Tesla’s brand strength index score fell from over 80 to just under 65, further signaling its diminished competitive edge.
Haigh summed up Tesla’s predicament: “Unless Tesla can come up with a whole range of new products that will really excite consumers and unless they can mitigate some of the antagonism caused by their leader, they will be seen as past their peak and will begin to go down.”
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