Tesla is seeing its brand value decline, even though the company is one of the most valuable in the world. According to a report from Brand Finance, Tesla’s brand value has dropped for the second consecutive year, now standing at $43 billion, down from $58.3 billion a year ago and $66.2 billion in early 2023.
Toyota and Mercedes-Benz now sit above Tesla as the automakers with the most valuable brand, at nearly $65 billion and $53 billion respectively.
According to the London-based research firm, there are several key factors behind Tesla’s declining brand value. One of those is its vehicle lineup. While competitors continue to introduce new models, Tesla has not launched a new vehicle in years. There is of course the Cybertruck, which was originally unveiled in 2019 and which finally made it to production in late 2023, but its design has proven polarizing and it has not been a driver of growth like the Model 3 and Model Y have been when they were introduced.
Another major factor influencing Tesla’s brand perception is Elon Musk. While Musk has long been a controversial figure, his recent high-profile involvement in politics and outspoken posts on his social media platform X have further alienated potential customers. Brand Finance’s research found that Tesla’s scores for consideration, reputation, and recommendation have declined globally, particularly in Europe, where Tesla’s consideration score dropped from 21% to 16% in 2024.
Additionally, Musk’s support for President Trump and his policies that appear contrary to environmental and EV-friendly initiatives has raised concerns has further alienated a segment of Tesla’s potential buyers.
“There are people who think he’s wonderful, but many that don’t. 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, but that’s only one of many factors,” said Brand Finance CEO David Haigh. (via CNBC)
Brand says Tesla’s declining brand value is also linked to a shift in focus within the company. While Tesla continues to be a leader in EVs, its focus on artificial intelligence, Full Self-Driving (FSD) technology, and humanoid robotics has led some to question whether the company is prioritizing these ventures over its core automotive business.
Despite the decline in brand value, Tesla still enjoys strong customer loyalty in the US, with over 90% of existing Tesla owners likely to stick with the brand.
Tesla is set to unveil several new, more affordable models this year, as well as bring the new Model Y to North America, which could help solve the concerns around Tesla’s lineup, and improve its overall brand value. However, with Musk’s continued involvement in politics and social media, it may be difficult for the company’s brand value to buck the trend of recent years.
