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The Tesla Model Y is arguably the best electric vehicle to ever hit the market, but sales data shows that the damage to its brand may be permanent. The question is whether or not the market is willing to “separate the art from the artist.” The Model Y has an impressive list of firsts. It’s the first production vehicle to use a single-piece rear underbody casting, otherwise known as the gigacast. It’s the first to use a structural battery pack integrated into the body, and it’s the first electric vehicle to become the world’s best-selling car model (back in 2023). Despite this, management foibles followed by lackluster corporate governance led to serious damage to the Model Y’s brand image. The debate is playing out real-time in social media.
Here’s one of many long Reddit posts from Tesla Model Y owners about how they now feel about their Tesla branded car.
“I’m embarrassed of my Tesla Model Y. I bought the car thinking that going green was going to be the future. Now with Elon being….well…being Elon, I’m embarrassed to be driving my car. Does anyone else feel this way?”
DCovic responded with:
“Yes. I love my Model Y but, because of Elon, I am embarrassed to drive it. I do think of all of the first-class excellent engineers who have worked on the Tesla cars. That does help.”
MJC136 pointed out that Tesla isn’t unique when it comes to bad management behavior:
“No. If I cared about the CEO of companies and their personal / political views then I wouldn’t shop from / use:
Apple, Amazon, Kellogg, Facebook, Instagram, Spotify, Uber, Whole Foods, Cheesecake Factory, Qdoba, Wawa, Walmart, Sam’s Club, Shell Gas station, Exxon, and so on.”
Bwoo2024 added a chill response:
“Nope. I didn’t buy the car because of Elon. Also, just because we own two Teslas, it doesn’t mean we support Elon’s behavior, etc.”
It’s amazing that we can measure this stuff, but, according to Standard & Poor’s (a financial intelligence company), Tesla’s U.S. loyalty reached a high point in June 2024, with 73% of Tesla households choosing to buy the brand again. The rate fell sharply after July 2024, bottomed at 49.9% in March 2025, then recovered to 57.4% in May. The rebound placed Tesla above the industry average and roughly in line with Toyota, while trailing Chevrolet and Ford. The fall was described as an unprecedented loyalty drop for an industry leader.
Politics and Brand Perception
Analysts tie the drop in brand loyalty to Elon Musk’s political endorsements and public activism, which clashed with parts of Tesla’s progressively-minded customer base. The timing of Musk’s political activism aligned with the sharp decline in repeat purchases, which suggests a perception shock that pushed some owners to shop for alternatives. The brand now faces a “trust gap” that can influence purchase intent even when products test well.
Loyalty drives lifetime value, and it is critical because retaining existing customers costs much less than acquiring new ones. S&P Global Mobility follows actual household registrations across all states, which provides a clear view of repeat purchases and those who move to different brands. Tesla led loyalty from late 2021 through most of 2024, with quarterly rates above 60%. Few rivals every matched this metric.
Product Lineup and Competitive Pressure
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Tesla’s lineup aged while rivals released credible new EVs, which raised the bar on features, pricing, and interiors. Cybertruck arrived as the only new model since 2020, which limited showroom freshness compared with GM, Hyundai, and BMW. The gap gave competitors room to win shoppers who want choice in body styles and pricing bands.
Sales Trends by Region
Global momentum for Tesla sales cooled during 2025. Its U.S. sales volume fell about 13% in the first six months, which reduced market share in Tesla’s home market. Europe saw a 33% decline in the first half, where backlash to Musk’s politics has been more intense. This further weighed on the brand.
The Tesla Model Y, their best-selling vehicle, was hit even harder. In the United States, Tesla Model Y sales in the first half of 2025 were down by about 24% according to Kelley Blue Book and Cox Automotive. Across Europe, first-half 2025 Model Y registrations were about 33% lower than 2024 matching the overall company performance drop.
Operations, Refreshes, and Sentiment Headwinds
Tesla cited several weeks of lost production while retooling for a refreshed Model Y. Management also called out vandalism and hostility toward the brand, which can raise ownership angst. Elon Musk said demand looked stable absent macro issues, which set a high bar for the Tesla Model Y refresh to restore delivery pace.
Customer Migration and Who Is Winning from Tesla Defections
For years, Tesla gained nearly five new households for each one it lost, which placed it in a different class from mainstream automakers. That inflow began falling in July 2024 and has sat below two gained for each one lost since February 2025. Brands now netting more Tesla owners include Rivian, Polestar, Porsche, and Cadillac, which shows how defections now spread across premium and adventure-leaning segments.
A Lesson in Corporate Governance
Corporate governance is the system of rules, incentives, and oversight that directs a company, it aligns management decisions with shareholder interests while managing risk and accountability. Weak governance shows up when a board lets personality outrun process. Tesla is a cautionary case, where brand risk rose as Elon Musk’s political activism coincided with a sharp fall in customer loyalty, yet the board kept him in place. Not only did they keep him in place, they approved a new grant of 96 million shares worth about 29 billion dollars while his prior pay package remained under legal challenge. A typical, functional board would separate board chairman and CEO roles, impose clear conduct and performance triggers, run independent brand risk reviews, and consider reprimand, leave, or succession to protect long term value.
Bottom Line
Tesla still leads U.S. EV sales, yet its lead has narrowed. Political turbulence, an aging lineup, and stronger rivals combined to dent repeat purchases. This turned a structural advantage into a repair job. The recovery in loyalty to the high fifties shows resilience, while regional declines and customer defections show real risk. The next chapters will hinge on how fast Tesla refreshes products, strengthens brand trust, and converts the autonomy narrative into everyday value that owners can feel.
Please Drop Your Thoughts in the Comments Below
If you own a Model Y, do you feel proud driving it today, or do you feel conflicted because of the CEO?
Would a refreshed Model Y be enough to win back your next purchase, or would it take leadership changes?
Chris Johnston is the author of SAE’s comprehensive book on electric vehicles, “The Arrival of The Electric Car.” His coverage on Torque News focuses on electric vehicles. Chris has decades of product management experience in telematics, mobile computing, and wireless communications. Chris has a B.S. in electrical engineering from Purdue University and an MBA. He lives in Seattle. When not working, Chris enjoys restoring classic wooden boats, open water swimming, cycling and flying (as a private pilot). You can connect with Chris on LinkedIn and follow his work on X at ChrisJohnstonEV.
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Source: torquenews.com
