What Tesla (TSLA -4.17%) has accomplished in its limited time as a public company has been extraordinary. In its roughly 13 years as a public company, it drove electric vehicles (EVs) from being the butt of a joke to being on the cusp of mass adoption, and the very clear future of the automotive industry.
With that level of success and innovation comes magnified scrutiny of the company and its polarizing CEO, Elon Musk. There is a long list of things for consumers, media, and maybe investors, to criticize, and the argument has been made that the lauded electric vehicle maker could be losing some of its shine.
But if you think Tesla is losing popularity with consumers, think again, according to a recent automotive industry award.
Rehashing the narrative
Whether you agree or not, in addition to mostly minor vehicle complaints, Tesla has been criticized for aspects of its workplace culture, occupational safety, business practices, self-driving claims, and even potential distractions such as Musk taking over Twitter.
On top of all that, amid a bumpy 2022 in the automotive industry, with supply chain disruptions and rising interest rates, Tesla recently made a number of vehicle price adjustments that rubbed some consumers the wrong way.
For years Tesla generally raised prices as demand for its EVs grew consistently. However, early in 2023 the company dished out fairly aggressive price cuts -- with some models initially discounted up to 20% -- which caused some consumer backlash. Consumers who had recently purchased Teslas now had much less valuable vehicles and less value for trade-ins.
Ultimately, if you wanted to argue that Tesla could be losing popularity with consumers, and possibly investors, you'd have ammunition to back it up. However, the 2022 Automotive Loyalty Awards indicate a far different narrative when it comes to Tesla's connection with consumers.
Tesla overtakes Ford
For the first time Tesla topped Ford Motor Company (NYSE: F) for U.S. brand loyalty, according to S&P Global Mobility. In fact, Tesla taking the top spot for "Overall Loyalty to Make" marked the first time in the last decade that Ford didn't get the award -- Ford held the honor for 12 straight years.
Further, if you look at all of the manufacturer and make loyalty awards, Tesla was a big winner. Of the eight manufacturer and make level awards, Tesla was crowned with five of them, with General Motors (NYSE: GM) taking "Overall Loyalty to Manufacturer" and Subaru and Mercedes-Benz taking one each.
Tesla won't easily give some of these awards back, either. Remember that it was already a repeat winner for "Highest Conquest Percentage". And as more and more consumers consider swapping their gasoline-powered vehicles for EVs, many continue to look at Tesla first, which helps drive its high -- and very valuable -- conquest rate.
Why it matters
This is the 27th year for the loyalty awards. They are generated from an analysis of 11.7 million new U.S. retail vehicle registrations in 2022, and rate how often households that own new vehicles return to the market and acquire another new vehicle of the same make, model, or manufacturer. As an investor, it's nice to hear about the company whose shares you own winning awards -- but these victories go deeper than that.
It's expensive to lure consumers away from the competition in the highly loyal automotive industry, sometimes requiring hefty incentives or deals. And as the U.S. is potentially on the cusp of watching EV sales boom, Tesla's high loyalty and conquest rates suggest it has a future pipeline of strong sales demand and pricing power.
Whether you agree with the criticism surrounding Tesla or its polarizing CEO, the company doesn't appear to be losing any loyalty or brand power with consumers, and that's great news for its bottom line.
