A recent survey indicates that Tesla Inc. TSLA might be losing its allure among consumers, potentially impacting its sales figures. This development comes as CEO Elon Musk’s controversial actions and statements continue to make headlines.
What Happened: The appeal of Tesla among potential buyers is waning, partially due to Musk’s contentious public image, as per a recent survey. The company’s sales are expected to show a downturn in the upcoming quarterly report.
The market intelligence firm Caliber reported a significant drop in Tesla’s “consideration score,” which gauges consumer interest, Reuters reported on Monday. From a high of 70% in November 2021, the score plummeted to 31% in February.
“It’s very likely that Musk himself is contributing to the reputational downfall,” said Caliber CEO Shahar Silbershatz.
He indicated that 83% of Americans associate him with the brand. Controversies surrounding Musk’s political statements and actions are believed to be detrimental to Tesla’s image and sales.
While Tesla’s sales grew last year, thanks to aggressive pricing strategies, the brand’s consideration score decreased by 8 percentage points from January, even as competitors like Mercedes, BMW, and Audi saw slight increases.
Other factors such as economic concerns, the absence of new affordable models, and rising competition are also affecting Tesla, with analysts predicting a mere 3% increase in Tesla sales compared to a 15% rise in overall U.S. electric vehicle sales for the first quarter.
Amid these challenges, Tesla’s stock has dropped nearly 30% year to date, and several analysts have lowered the company’s target price in anticipation of disappointing first-quarter delivery results.
Despite the controversies, Tesla maintains high loyalty rates among its owners, with 68% repurchasing the brand. However, a growing number of potential EV buyers are exploring alternatives due to Musk’s polarizing behavior.
Why It Matters: The survey’s findings come on the heels of a series of analyst reports that have painted a grim picture for Tesla’s first-quarter deliveries. Analysts have referred to the quarter as a “nightmare” for Tesla, with lowered target prices reflecting the anticipated shortfall in deliveries.
Earlier, Tesla made a strategic shift, which could result in fewer vehicle deliveries but potentially higher profitability. This tactical change was a response to the company’s last quarterly earnings report, which acknowledged a dip in demand for electric vehicles and projected notably lower delivery growth rates in 2024 compared to the previous year.
Photo via Shutterstock
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