Leading American automaker Tesla beat all other automotive brands in customer loyalty in the first half of 2023, S&P Global Mobility’s data revealed.
The results are unsurprising, given that Tesla also impressed in retaining customer loyalty in the luxury segment with a whopping 68% rate in the Jan-Apr period, EV-a2z reported.
Tesla’s brand loyalty rate
Tesla continues to defend its position as the top brand, with the highest loyalty rate of 68.4% from January to June.
The press release noted that all models in the S 3 X Y lineup recorded remarkable retention rates. However, the popular electric sedan Model 3 led the pack with over 74% loyalty rate among returning buyers.
Interestingly, most of them buy the world’s top-selling vehicle, the Tesla Model Y.
“Tesla has proven it has a strong connection with its customers despite increasing competition in the BEV market. Calculated price drops and timely incentive offerings have helped to boost interest and keep the brand’s positive momentum going.”
Vince Palomarez, S&P Global Mobility Associate Director of Loyalty Product Management
Overall auto industry’s brand loyalty rate
Despite the strong brand loyalty of Tesla customers, S&P Global Mobility warned that the rate was stagnant in the overall automotive industry.
It noted that US-based customers’ brand loyalty remained at 50.6% in H1 2023, similar to the results in the same period last year.
The 50.6% brand loyalty rate in the first six months of 2022 and 2023 also indicates notable declines from the following records:
- H1 2019: 54.7%
- H1 2020: 54.8%
- H1 2021: 52.7%
- H1 2022: 50.6%
- H1 2023: 50.6%
These declines were only natural, given the adverse effects of the COVID-19 pandemic, including inventory shortages and supply chain constraints.
According to Palomarez, the rise in vehicle inventories is proving effective in reducing the decline in customer loyalty.
“Rising inventory levels are helping to curb the loyalty declines we’ve seen in previous years. 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.”
Vince Palomarez, S&P Global Mobility Associate Director of Loyalty Product Management
Other highlights
The press release also indicated General Motors as one of the leading automakers with the highest brand loyalty, “leading all multi-brand manufacturers for the first half of 2023.”
Buick Land Rover also performed impressively in the same period with a more than 10% increase in its brand loyalty rating, &P Global Mobility noted.
Likewise, the Lincoln Nautilus and Ford F-Series also reported significant advancements as the “leaders in model loyalty.”
It is also worth noting that conquest volume grew 7% in the first six months of the year compared to the same period in 2022.
“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. 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.”
Tom Libby, S&P Global Mobility Associate Director for Loyalty Solutions and Industry Analysis
Tesla’s reputation for offering cutting-edge electric vehicle models with industry-leading safety is among the top factors in retaining the loyalty of its customers. It continues to innovate and ensure its customers receive value for their money.
