The authors of the Brand Finance study claim that Tesla’s brand value has been falling for the second year in a row. In 2024, it decreased from $58 billion to $43 billion, and such dynamics are largely due to the controversial figure of Elon Musk. The company’s sales volumes are also falling and its lineup is aging, so the largest manufacturer of electric vehicles risks losing its status to competitors.
Image Source: Tesla
The Brand Finance study takes into account the opinions of 175,000 respondents worldwide, of which approximately 16,000 shared their views on Tesla. In combination with financial indicators, these intangible estimates form a conditional value that Brand Finance representatives call “brand value.” By the way, among automakers, the most expensive brand remains Toyota with $64.7 billion, and Mercedes-Benz is in second place with $53 billion.
Last year, Tesla’s stock price rose 63% and reached record highs in December as the market realized the degree of mutual influence between Elon Musk and Donald Trump, who won the US presidential election in November and promised Musk a high post in his government. Musk spent about $277 million on the election campaign of Trump and his associates, and a post in the government would theoretically give him the opportunity to create more favorable conditions for the work of his companies, which includes Tesla.
The eccentric billionaire Musk, who is increasingly drawn into political activities, polarizes ordinary people based on their attitude towards him. Some people like him, others are annoyed, and this attitude is inevitably projected onto the companies he heads. The criteria for “attractiveness to choose,” “reputation,” and “recommendation” for the Tesla brand have worsened in their ranking in all major markets for the sale of this company’s products. In Europe, “attractiveness to choose” fell from 21% to 16% last year, according to Brand Finance. But in the US, the level of Tesla customer loyalty reaches 90%, which implies their willingness not to part with the products of this brand over the next 12 months. Unfortunately, the recommendation rating for the Tesla brand in the US decreased over the year from 8.2 to 4.3 points.
There is a growing risk that Tesla will not only not be able to sell electric vehicles in the same volumes, and at the end of last year they actually decreased by 1% for the first time, but also will not be able to maintain the average sales price at a level that allows them to maintain the dynamic development of their own business in terms of financing . Tesla’s share of the primary US electric vehicle market fell from 55% to 49% last year. The brand strength index also decreased from 80 to 65.
Elon Musk’s personality does not have the best effect on the value of the brands he leads. Last year, the brand value of social network X fell by 65% to $498 million, and this cannot be compared with Twitter’s performance when it was an independent company. Before Musk bought it, Twitter’s brand value reached $5.7 billion in 2022. The exodus of users and advertisers was only exacerbated by the name change that Musk initiated after the deal.
However, Musk’s aerospace activities so far demonstrate positive dynamics in “reputational and financial indicators.” The value of the SpaceX brand last year grew by 11% to $3.8 billion. In addition, in the United States, about 45% of respondents said they had heard of such a company, and for a representative of a specific industry this is a very high figure. The Starlink subsidiary, whose brand is worth $2.4 billion, is separately valued. As the number of subscribers grows and the constellation of communications satellites expands, this amount will only grow.