Tesla is having trouble wooing new EV shoppers
Tesla is struggling to expand its appeal outside its tech bro contingent, and other automakers are chipping away at its market share.
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- Tesla is struggling to impress new owners, according to JD Power.
- Traditional automakers are providing EVs for a new contingent of EV shoppers.
- Tesla's chokehold on the US electric vehicle market is starting to wane.
Tesla is having difficulty impressing new electric vehicle buyers, according to a new study from JD Power.
The firm's annual owner satisfaction survey found that owners of electric vehicles built by traditional automakers connected more with their cars than Tesla owners. While Elon Musk's car company remains popular among its most loyal customers, its performance among newer buyers is lackluster, JD Power found.
That's bad news for Tesla, especially as a yearlong slowdown in EV demand is beginning to impact the EV leader's sales. Tesla has reported two straight quarters of falling sales, reversing years of growth for the company.
On top of that, Tesla's strategy to undercut competitors on price is no longer enough to keep growing. As a result, the car company's financial performance has taken a hit in the first half of 2024 with non-autos related revenue driving the most growth.
At a time when the profile of the average EV shopper is skewing away from Tesla's bread and butter, Frank Hanley, senior director of auto benchmarking at JD Power, said traditional automakers are doing a better job of meeting the average shopper's needs.
"They're launching enhanced vehicles that are more in line with what customers want, including improved interior storage and higher quality materials, as well as ensuring features have ease of use," he said in a press release.
Tesla's easy ride is over
Tesla made a name for itself among a very specific group of tech-savvy, wealthy early adopters.
The typical Tesla driver is so stereotypical that they have a nickname: Tesla bros. These drivers are enticed by Tesla's unique user experience and high-tech accessories — and also have more patience for features that are hard to use or have initial bugs.
But the non-Tesla bro contingent is looking for something more practical that mimics the experience of their gas-powered car.
The results of the JD Power survey reflect what has been apparent to industry experts for some time now: Tesla's chokehold on the US electric vehicle market is starting to wane as more options enter the market.
Tesla's share of US electric vehicle sales in the second quarter fell to 49.7%, marking the first time its share had dropped below 50% in a quarter, according to data from Cox Automotive. That's off from 55% share a year ago and nearly 80% market share back in 2020, according to Experian data.
That leaves a potential opening for traditional automakers at a time when the EV market is getting tougher.
Chevrolet, for example, is leaning in and flooding the market with new electrified versions of the Blazer, Equinox, and Silverado – stalwart nameplates that customers already trust. That's already helped the brand chip away at Tesla's market share. And at Ford, EV sales were up 61% in the second quarter, trailing only Tesla in sales so far in 2023.
"For BEVs, recent launches from traditional manufacturers have surpassed perennial leader Tesla when it comes to owners' level of emotional attachment and excitement with their new vehicle," Hanley said.