If you’ve been an owner of a Tesla for an extended period, the time may have come to explore other options. Fresh offerings with improved pricing, extended range, and unique features may have caught your eye. Alternatively, the behavior of a particular CEO closely associated with Tesla might have put you off. If this is the case, you’re not alone.
While Tesla continues to lead in electric vehicles in the U.S. and globally (subject to fluctuation depending on BYD’s performance each quarter), its market share in this country is dwindling. This outcome is somewhat inevitable. While Tesla blazed the trail in the field, there are now numerous exceptional EV alternatives that match or surpass the capabilities of vehicles like the Model 3 and Model Y.
Decrease in Tesla’s market share
In the second quarter of 2024, Tesla’s share of the U.S. EV market dropped below 50% for the first time. While still the dominant EV brand in America, its aging vehicle lineup, as CEO Elon Musk shifts focus to robotaxis and AI, is prompting customers to explore other options.
So where do these owners turn to after parting ways with Tesla? It’s a complex picture.
A recent analysis by Edmunds revealed insights on Tesla trade-ins, drawing attention with the headline: “More than half of Teslas are being traded in for gas cars.” Although this holds true, there are nuances to consider.
Firstly, this data is derived from conventional dealerships and does not encompass trade-ins for newer Teslas or other direct sales startups like Rivian, Lucid, and Polestar (nor does the model-specific trade-in data below). Secondly, while half of all dealer trade-ins result in customers returning to gas-powered vehicles, this number has significantly decreased; back in 2019, as high as 71% of Tesla owners were switching to gas-powered cars at dealerships.
“In essence, those trading in their Tesla in 2019 were mainly seeking to depart from an EV and return to a gasoline-powered vehicle,” noted Edmunds. However, this situation is no longer as prevalent.
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What does this reveal? Firstly, the tales of EV owners ditching their vehicles after a single experience are exaggerated. Most studies indicate that EV owners tend to stick with electric vehicles in the long run, even if they may incorporate a second or third gas or hybrid vehicle. Secondly, the proliferation of other EV choices and publicly accessible charging stations is keeping individuals within the electric vehicle ecosystem over the long term.
The automobiles customers are swapping to are particularly captivating at present. The leading vehicles include the Ford F-150 Lightning, the Cadillac Lyriq, and the Kia EV9, in that order. Following them are the well-established Chevy Silverado 1500 (seems like the Cybertruck isn’t appealing to everyone) and the BMW i4:
Source: Edmunds
There are several Tesla-like cars, two traditional trucks, one of which is electric, and the EV9, likely suitable for families who have outgrown Tesla’s smaller models.
While EVs might not constitute the majority of trade-ins, EV models remain the most sought-after by former Tesla owners. No single gas model is enticing people away from their Teslas. The most popular gas-powered cars in the mix are the Chevy Silverado, Ford F-150, and Toyota Tundra, all conventional trucks indicating either a lifestyle shift or altered priorities from what Tesla provides.
Again, this data pertains to dealer trade-ins for the current year and excludes the sales of Rivians, Lucids, or Polestars. (And, for goodness’ sake, anyone winding up with a Fisker.) Hybrid trade-ins are also not separately categorized in our dataset for models such as the F-150, CR-V, and Tundra, suggesting additional strong hybrid acquisitions here as well,” a spokesperson from Edmunds informed InsideEVs.
Furthermore, the analysis does not include individuals sticking with Tesla, a number that remains substantial. “Tesla still holds an 87% brand retention rate, surpassing non-electric automakers like Lexus at 67% and Toyota at 54%,” noted Bloomberg Intelligence in April. Additionally, “81% of potential Tesla buyers are new customers transitioning from rival EV brands, in contrast to 42% of Nissan’s prospective purchasers.”
In essence, Tesla is not to be underestimated. However, introducing new models into the lineup would be highly beneficial at this juncture.
Contact the author: patrick.george@insideevs.com
