Tesla’s Brand Value Plummets 26% Amidst CEO Elon Musk’s Controversial Politics
The electric vehicle giant Tesla has seen its brand value plummet by 26% in 2024, marking the second consecutive year of decline. According to research and consulting firm Brand Finance, Tesla’s brand value now stands at an estimated $43 billion, down from $58.3 billion at the beginning of 2024 and $66.2 billion at the start of 2023.
Aging Lineup and CEO’s Antagonism Take a Toll
Brand Finance attributes the decline to factors including an aging lineup of vehicles and CEO Elon Musk’s controversial politics. Musk’s public persona and rhetoric have been polarizing, with some consumers viewing him as a visionary, while others are turned off by his antics.
Toyota and Mercedes Lead the Pack
In contrast, Toyota has emerged as the most valuable brand in the auto industry, with a brand value of $64.7 billion. Mercedes follows closely behind at $53 billion. Brand Finance conducts comprehensive consumer surveys and analyzes financial data to estimate the monetary value of brands.
Consumers’ Perception of Tesla Diverges from Wall Street’s
Interestingly, the way consumers view Tesla diverges significantly from Wall Street’s assessment. While Tesla’s stock price soared 63% last year, reaching a record in December, consumer perception of the brand has taken a hit. Brand Finance CEO David Haigh notes that Musk’s political rhetoric and public persona have contributed to the decline.
Key Metrics Show Significant Decline
On key measures such as “consideration,” “reputation,” and “recommendation,” Tesla’s scores declined across the board in major markets where it operates factories and sells its cars. The company’s consideration score dropped from 21% to 16% on average in Europe, while competitors Mercedes and BYD beat Tesla on consideration and recommendation scores outside the U.S.
Tesla’s Loyalty Score Remains High, but Recommendation Score Drops
While Tesla maintained a high loyalty score of 90% in the U.S., its recommendation score in the U.S. dropped from 8.2 out of 10 to 4.3. Haigh warns that Tesla’s declining scores and brand value are a sign that the company’s “pulling power is weakening.”
Troubling Signs Ahead
There are already troubling signs on the horizon. Tesla’s deliveries for 2024 declined by about 1% to 1.79 million, despite increased demand for battery electric vehicles worldwide. In the U.S., Tesla’s market share in EVs dropped to 49% from 55% a year earlier.
Brand Strength Index Score Dips
Tesla’s brand strength index score has also dipped from just over 80 to just under 65, indicating how well a brand is doing compared to competitors on intangible measures. Haigh notes that unless Tesla can come up with new products that excite consumers and mitigate the antagonism caused by Musk, the company will be seen as past its peak and will begin to decline.
Musk’s Political Activity Extends Beyond the U.S.
Musk’s political activity extends beyond the U.S., with reported connections to Russian leader Vladimir Putin, Italy’s Giorgia Meloni, Brazil’s Jair Bolsonaro, and Argentina’s Javier Milei. He has also made public appearances with Israel’s Benjamin Netanyahu and endorsed Germany’s far-right Alternative for Germany (AfD) party.
X and SpaceX Brands Also Evaluated
Brand Finance also evaluated other Musk-led brands, including X, aerospace and defense contractor SpaceX, and SpaceX’s Starlink satellite internet business. The overall brand value of X dropped 26% to $498 million from $673 million, while SpaceX’s brand value increased 11% to $3.8 billion. The Starlink brand is valued at $2.4 billion and is expected to increase as the company continues to add new users and show consistently higher revenue from monthly subscribers.
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