Tesla is facing an unprecedented decline in customer loyalty. Data from Edmunds, shared with Reuters, shows that Tesla vehicles accounted for 1.4% of all trade-ins at US dealerships through 15 March, up from 0.4% during the same month last year.
This marks the highest monthly level ever recorded by the firm for used Tesla vehicles traded in toward the purchase of new or used cars. The figure excludes trade-ins for new Teslas or other direct-to-consumer electric vehicle brands.
The trend is linked to mounting controversy surrounding Elon Musk, who currently heads the Department of Government Efficiency under President Donald Trump.
His involvement has sparked public backlash, including protests under the banner “Tesla Takedown”, criticising federal budget cuts and the cancellation of humanitarian programmes.
“It’s no longer my brand”: owners feel alienated
“Brand loyalty is becoming increasingly uncertain as Elon Musk’s political engagement grows, Tesla vehicles depreciate, and the brand saturates major metropolitan areas,” states Jessica Caldwell, Head of Insights at Edmunds.
Social media has amplified this sentiment. Owners in the United States and parts of Europe are posting videos of themselves returning or selling their electric cars in protest.
Some have reported attacks on Tesla dealerships and charging stations, raising security concerns. In response, President Trump has threatened to classify such incidents as acts of domestic terrorism.
Declining demand could boost rivals
Interest in Tesla is falling fast. Edmunds reports that consideration of Tesla vehicles in February dropped to 1.8%, the lowest level since October 2022. That figure had peaked at 3.3% in November.
Additionally, Cox Automotive estimates that Tesla’s sales declined by 10% in February, due to weaker performance of the Cybertruck, Model 3, and Model Y.
“These shifts in consumer sentiment represent an opening for legacy manufacturers and EV startups,” Caldwell explains. She notes that brands offering competitive pricing, innovative technologies, or simply fewer controversies could attract both disillusioned Tesla owners and first-time EV buyers.
Used Tesla prices continue to fall
Meanwhile, used Tesla prices are declining, mirroring trends seen in second-hand EVs from Ford, Kia, and Hyundai, according to Edmunds. Prices are expected to drop further as recently traded-in Teslas are reconditioned and re-enter the market.
“Selling the car feels so much better than slapping on a bumper sticker saying ‘I hate Musk’,” wrote Fred McKinney, a corporate consultant, on LinkedIn. He traded in his 2018 Tesla Model 3 to express his disapproval of the CEO.
Tesla has not responded to requests for comment. The company expects its vehicle business to grow again this year, following a small decline in 2024. However, recent data paints a challenging outlook—one that could shift the competitive landscape of the global electric vehicle market.
