Tesla’s Brand Value Faces Steep Decline

Tesla’s brand value (different from its share price) plummeted 26% in 2024, marking its second consecutive annual decline, according to research firm Brand Finance. The automaker’s brand is now worth $43 billion, down from $58.3 billion a year ago and $66.2 billion in 2023. Comparatively, Toyota and Mercedes hold stronger positions, with brand values of $64.7 billion and $53 billion, respectively.

This decline stems from an aging product lineup and the polarizing influence of CEO Elon Musk. While Tesla’s share price soared 63% last year, driven by investor optimism and record-high share prices, public perception told a different story. 

Key consumer metrics like consideration, reputation, and recommendation fell significantly in Tesla’s major markets, including the U.S., Europe, and Asia. For example, in Europe, Tesla’s consideration score dropped from 21% to 16% over the year, while U.S. recommendation scores sank from 8.2 to 4.3 out of 10.

Deliveries slipped 1% to 1.79 million units in 2024, underscoring the brand’s struggles to retain dominance. Meanwhile, Tesla’s brand strength index score dropped below 65, highlighting growing competition from rivals like Mercedes and BYD, particularly in non-U.S. markets.

What Does This Mean for Me?

Despite maintaining a 90% loyalty rate among existing U.S. customers, Tesla’s overall market share in electric vehicles fell from 55% to 49%, even as global EV demand surged.

Tesla’s future hinges on refreshing its product lineup and mitigating the reputational risks tied to its outspoken leader, whose political controversies may further erode consumer trust. Analysts contend that this fall in brand value will inevitably hurt the company’s share price.