For many years, if you wanted to be an early adopter of electric vehicles (EVs), you had two choices: Tesla (TSLA 4.42%) or a vehicle that was often the butt of a joke, and more often than not, resembling a plastic toy car.
While Tesla is still highly lauded and doing great things with its vehicles, the rest of the automotive industry has made significant progress in developing desirable EVs. It's even apparent in a recent survey that had a new automaker topping Tesla in a category it had dominated only a year ago.
Let's dig into the survey, uncover what automaker topped Tesla and why, and how much it really matters for investors.
Digging into the details
J.D. Power released a U.S. Electric Vehicle Experience Ownership Study, which essentially gauges consumer satisfaction with battery range, availability of public charging stations, cost of ownership, driving enjoyment, ease of charging at home, styling, safety, technology, service, and vehicle quality -- all fairly important attributes when investors are choosing which automaker to invest in as EVs begin to take over the road.
As consumer-survey results are tallied, the automakers and their vehicles are ranked on a scale up to 1,000. Tesla essentially owned the survey in 2022 with its Model 3, Model Y, and Model S taking first, second, and third place as vehicles with the highest satisfaction.
2023 shows a slightly different story, with Rivian's (RIVN -3.51%) R1T ranking highest overall for consumer satisfaction among premium EVs, with a score of 794 out of 1,000, and Tesla taking second place with its Model 3.
The discrepancy in premium EVs was fairly wide, as those two were the only vehicles to rank above the segment average.
There are a couple of additional takeaways for investors to keep in mind when selecting EV makers to invest in. The survey found that general satisfaction was all higher with consumers that used their EV to tow, and is likely an important reason why Rivian's R1T was able to dethrone Tesla's Model 3 in 2023. It will be incredibly interesting to see how Tesla's Cybertruck compares to the R1T once it enters the picture.
First-time mass market EV owners cite lower running costs and tax incentives as their largest purchasing incentive. That factor is important for investors to note, as it's imperative for automakers to meet and qualify for these incentives to boost demand and conquest rates -- what the industry considers as bringing in a new consumer from another brand or manufacturer.
"The electric vehicle landscape is changing quickly, and newer models are bringing in more mainstream, first-time EV buyers," said Brent Gruber, executive director of the EV practice at J.D. Power, in a press release. "Today's EV owners are looking for quality, reliability, driving enjoyment, safety, and technology features."
How much does it matter?
For investors, these surveys, reports, and awards are more important than many realize. Grassroots research is incredibly important to understanding consumers' reaction to products, and as we can't individually drive thousands of miles on multiple EV vehicles, these surveys give us valuable insight to which product is succeeding with a broad number of consumers, and why.
For this survey in particular, it gives important credibility to Rivian as a newcomer in the EV industry, but it doesn't take much away from what Tesla has already accomplished.
It's also important for investors to take in many of these surveys and reports together, as S&P Global Mobility recently unveiled its Automotive Loyalty Awards, which recorded Tesla topping Ford Motor Company in "Overall Loyalty to Make," which the latter had won for a staggering 12 consecutive years. That essentially means that consumers driving Tesla vehicles tend to stay with the brand for another purchase, which is highly valuable in the automotive industry.
So is Tesla still king?
Investors would be wise to take note of the many surveys and reports about vehicle quality and satisfaction, as it provides valuable insight into how consumers perceive and desire brands and vehicles.
Once upon a time, Tesla was nearly the only legitimate option for a premium EV, and it still remains a top option for consumers and top EV stock for investors. But it's also clear through the many new EVs hitting the roads that the competition is catching up, and for a new company like Rivian, that's important for investors to note.
