In a recent analysis conducted by Citi analysts earlier this year, Tesla emerged as the leader in brand loyalty among U.S. automakers. While the electric vehicle (EV) pioneer continues to enjoy high loyalty rates, its competitors are managing to entice only a fraction of its customer base, as highlighted in a recent report by S&P Global Mobility.
When it comes to electric compact utility vehicles, the Tesla Model Y stands out with an impressive 37.3 percent loyalty rate. Following closely is the Ford Mustang Mach-E at 18.5 percent. Notably, a substantial 70.5 percent of Model Y owners opt for another EV for their next purchase, with the remaining choosing to switch to gas-powered SUVs and trucks, according to S&P's findings. This trend is partly influenced by the significant price disparity between the Model Y and Tesla's luxury EVs, the Model S and Model X.
As of now, the Model Y Long Range begins at $50,490 before taxes, fees, and incentives, with Tesla discontinuing the lower-priced standard range variant from its online configurator. In comparison, the Model S starts at $74,990, and the Model X's starting price is nearly $80,000 before taxes and fees.
Anticipation is building around the upcoming Tesla Cybertruck, which could potentially bridge this pricing gap. After Ford reduced the prices of the F-150 Lightning in July 2023 to a starting MSRP of just under $50,000, Tesla CEO Elon Musk hinted at the possibility of the Cybertruck undercutting Ford's electric truck.
It's worth noting that some Model S buyers are exploring options outside of the Tesla brand. This is partly attributed to the Model S's decade-long presence in the market, a factor that typically leads to a decline in loyalty rates, as detailed in the report. Approximately 3.4 percent of Model S buyers are switching to the Lucid Air, followed by the Rivian R1T at 1.8 percent, Mercedes-Benz EQS at 1.6 percent, and Rivian R1S at 1.2 percent.
However, in the broader context, Tesla continues to dominate the landscape. Nearly 60 percent of Model S owners choose to stay within the Tesla family, while an impressive 72.8 percent of Model 3 owners also remain loyal to the brand.
A previous study by S&P indicated that 28.6 percent of Tesla buyers made a direct switch from legacy automakers like Honda and Toyota. It's important to note that the latest findings are based on 12-month rolling data through June 2023 and may not necessarily reflect the preferences of older buyers.