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Tesla's Unwavering Consumer Loyalty: A Market Analysis

Despite increasing competition in the EV market, Tesla continues to demonstrate market leadership through its impressive customer loyalty, strong brand metrics, and resilient stock performance, as analyzed by Citi analysts.

Tesla logo
Tesla logo

The esteemed electric vehicle manufacturer, Tesla (NASDAQ: TSLA), continues to lead the market with its robust customer loyalty, according to a note by Citi analysts. In an examination of US automobile manufacturers, these analysts found that the Elon Musk-led company maintains superior loyalty metrics in the industry.

Tesla's Brand Loyalty Metrics: A Closer Look

The analysts revealed that Tesla has an approximate 67% brand loyalty rate (LTM as of Q1), outperforming the 46% held by other luxury brands. In recent years, Tesla's customer allegiance has shown a slight upward trend. A short-lived dip in 2021, attributable to supply constraints, is the only deviation from this otherwise rising trend.

Model 3 and Model S: Variance in Customer Loyalty

Diving deeper into Tesla's product portfolio, the analysts highlighted varying levels of loyalty across different models. Tesla's Model 3 demonstrated the highest customer loyalty, while the Model S fell short in comparison.

Awaiting the Impact of New Entrants on Tesla's Market Dominance

The entry of new electric vehicles into the market might change the current dynamics. "It will be interesting to see how this evolves as new EVs enter the market, but the resilience to date we think is impressive," the analysts noted.

Tesla's Stock Performance: A 2023 Perspective

Tesla's share value has increased by more than 46% in 2023, with each share presently trading around $175. Despite this growth, the stock's value is considerably lower than its 2021 peak, which exceeded $400 per share.