Tesla’s Customer Retention Cratered After This One Elon Musk Decision

Sometimes it takes just one moment, one careless remark, one bad decision, to wreck a business. Former British high-street jeweler Gerald Ratner knows about it all too well.

Related: Elon Musk Somehow Managed To Make Everyone Hate Electric Cars

While giving a talk in 1991, he described his company’s affordable jewelry as “total crap,” a line that probably raised a laugh from the audience but very nearly sank his family’s highly successful firm and cost Ratner his job.

Tesla CEO Elon Musk’s Ratner moment, according to new data from S&P Global Mobility and published by Reuters, was endorsing Donald Trump’s presidential campaign in summer 2024. That decision resulted in a calamitous drop in customer retention for a brand which used to enjoy the best loyalty rates in the entire industry.

Loyalty Cracks After Political Move

The figures reveal Tesla customer loyalty peaked in June 2024, at which point 73 percent of the its US customers looking to replace their car bought another of its EVs. But in July, following Musk’s endorsement of Trump in the wake of an attempt on the latter’s life, the loyalty rate began to drop at an alarming rate.

By March of this year, with Musk by this point causing further harm to Tesla’s brand image through his federal job-cutting drive at the newly-created DOGE agency, loyalty had sunk to 49.9 percent, its lowest level and below the national average, Reuters reports.

And sales figures for the period suggest it wasn’t only existing Tesla owners that were put off buying a new car from the brand, but prospective first-time Tesla owners, too. The company’s US sales declined 10.8 percent in January to June despite both the Model 3 having already been facelifted and a revised Model Y appearing midway through the period.

A Slight Recovery, but Still Behind

Musk has since left DOGE and fallen out with Trump and the report indicates loyalty has increased, though nowhere close to what it was last year. Just over 57 percent of Tesla customers in May bought another of the brand’s vehicles, a rate Reuters suggests is on a par with Toyota, but lags behind equivalent figures for Chevy and Ford.

Gerald Ratner was forced out of the company bearing his name in 1992 and a year later Ratner Group rebranded itself as Signet Group. Today it’s one of the market-leading jewelry groups, owning big-name brands like Kay Jewelers, Zales and Jared in the US, and H.Samuel and Ernest Jones in the UK.

Would it take something similar for car buyers turned off by Musk’s actions and opinions to bring about an equally impressive turnaround? Obviously, no one can answer that – unless they can see the future…