Tesla has the highest loyalty rate in the industry in the first half of 2023. The company's brand loyalty rate was 68.4%, compared to the industry's rate of 50.6%, according to S&P Global Mobility.
Brand loyalty among U.S. consumers halted in the first half of 2023, according to the S&P Global Mobility analysis of new vehicle registration data. The industry's brand loyalty rate of 50.6% remained equal to that of the same period in 2022, despite a 7% increase in consumer return to market. Experts noted that the lack of changes in loyalty is a positive sign for the industry.
S&P Global Mobility noted that luxury brands were the main contributors to reversing the decline, with brand loyalty rising 2.7 percentage points compared to last year. In the mass market, which accounts for the largest source of consumer return volume, brand loyalty fell by 0.4 percentage points over the same period.
“Rising inventory levels are helping to curb the loyalty declines we've seen in previous years,” said Vince Palomarez, associate director, Loyalty product management at S&P Global Mobility. “However, the distribution of inventory recovery varies by auto manufacturer, making it difficult to see any significant gains. Some brands were able to benefit from inventory recovery while others were unable to.”
Sales in the first half of 2023 increased by 7% compared to the same period in 2022. But, consumers were looking outside their usual channels for the cars they wanted to buy.
“The last few years have shown that if a consumer has a need for a certain type of vehicle, they are not going to wait for their preferred brand to supply it,” said Tom Libby, associate director for loyalty solutions and industry analysis at S&P Global Mobility. “This has opened the door for more brands to capture market share from traditional leaders. Years of investment in quality and technology among the industry has evened the playing field, and we are seeing some of the smaller brands take advantage of that.”
Tesla remained the leader with a loyalty rate of 68.4% in the first half of 2023. This is significantly higher than the 50.6% average among all brands. While all models in Tesla's lineup have high retention rates, Model 3 stands out as the clear leader with more than 74% of its returning consumers remaining loyal to the brand—mostly by acquiring a Model Y.
“Tesla has proven it has a strong connection with its customers, despite increasing competition in the BEV market,” said Palomarez. “Calculated price drops and timely incentive offerings have helped to boost interest and keep the brand's positive momentum going.”
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.