According to a new study by SP Global, Tesla has some pretty impressive retention rates for such a young brand. In the vast majority of cases, Tesla owners often change vehicles for another model of the brand. But it sometimes happens that users prefer to return to a thermal engine. This is the case for 30% of Model Y drivers.
In just a few years, Tesla has established itself as the world number 1 in electric cars. Recent European sales figures will not call this popularity into question. For good reason, in August 2023 the number of registrations recorded already exceeded that of the entire year 2022. Enough to consider a historic year for Tesla, which has just given a second lease of life to the Model 3, its essential electric sedan.
As the research firm S&P Global explains in its latest report, Tesla posts some pretty impressive retention rates for such a young brand and with such a small range. In a few figures, we learn in particular that almost 60% of Model S owners replace their vehicles with another Tesla.
Tesla posts indecent retention rates
Concerning the Model 3, this figure is even higher: 72.8%. Moreover, many owners of the electric sedan are setting their sights on the Model Y as a new vehicle. In fact, over the last 12 months, 40% of them chose the Tesla SUV. “Tesla is very successful in migrating its customers from a Model 3 to a Model Y, which contributes to high loyalty rates. Tesla has benefited from the industry’s shift toward SUVs. By releasing the Model 3 first, then the Model Y shortly after, it gave customers the option to migrate across the range,” explains Kent Chiu, associate director of S&P Global Mobility.
In its segment, namely electric SUVs, the Model Y has the highest retention rate on the market with 37.3%. It is closely followed by the Ford Mustang Mach-E, with 18.5%. However, if Tesla manages without difficulty to encourage users to migrate from a Model 3 to a Model Y, the SUV on the other hand seems to present itself as the final destination within the Tesla lineup for most households.
Model Y owners prefer to turn to the competition… or thermal
Why that ? The far too significant price difference between the Model Y and the Model S/X. As a reminder in the United States, the SUV sells for $50,490 (without government aid), while the Model S is priced at $74,990 and the Model X at $79,990. As a result, Model Y owners who want a change are turning to 70% towards an electric vehicle from a competing brand.
According to S&P, the remaining 30% are completely abandoning electricity for return to an SUV or pick-up equipped with a thermal engine. Tesla intends to remedy this defection with the Cybertruck, which will come de facto fill this gap left between the Model Y and the Model S/X. And indeed, we can already see all the interest that users are generating towards Tesla’s futuristic pick-up. As its launch approaches (scheduled between the end of 2023 and the beginning of 2024), the manufacturer has already recorded more than two million pre-orders.
Downgrading also remains a trend
Also note that some Model S/X owners do not hesitate to move downmarket with Tesla. 18% of them have abandoned their Model S for a Model Y and almost 8% for a Model 3. Of course, with the arrival of strong competitors on the Premium EV market, Model S/X users sometimes leave the Tesla stable for another brand.
Thus, regarding the Model S, the number 1 alternative remains the Lucid Air (3.4%), followed by the Rivian R1T (1.8%), the Mercedes Benz EQS (1.6%) and of the Rivian R1S (1.2%). “Historically, as a vehicle ages, loyalty rates decline. And every time there is a facelift, refresh or redesign, loyalty increases,” assures Mr. Chiu.
To hope to maintain its high retention rates, Tesla has already planned to expand its portfolio. Apart from the Cybertruck, the brand must also launch a reissue of the Roadster, as well as an entry-level EV priced at around €25,000. Now it remains to put them on the market to encourage Tesla owners to stay with Tesla.
Source: S&P Global