The Changing Landscape of Brand Loyalty in the Electric Vehicle Market

The automotive industry is experiencing a major shift as electric vehicles (EVs) become more popular among consumers. Not only are EVs changing the propulsion system of cars, but they are also changing the way buyers choose which brands to purchase from. Recent research shows that 85 percent of customers are willing to buy from an automaker that they have not owned before. This trend is causing a disruption in brand loyalty patterns that automakers have grown accustomed to.

Tesla, the largest EV manufacturer by volume in America, is a young enough brand that many of its customers are new to it. Therefore, it is almost guaranteed to poach customers from other brands. In the first quarter of 2023, the vehicle EV buyers traded in for their new vehicle was from a different brand than the car they were buying in 63 percent of cases, according to new research from Edmunds. By comparison, just 51 percent of trade-ins were from a different brand industry-wide.

As Tesla matures and more established automakers enter the picture with EVs that can compete with it, the number of disloyal customers is trending downward. Still, the EV market remains an opportunity for conquest, if not quite a wild west.

Brand Trust in the EV Market

New car buyers rate Tesla, BMW, Toyota, Chevrolet, and Audi as the five brands they trust the most to make an EV (in order of most to least). However, only Tesla and Chevrolet rank among the five biggest EV manufacturers by volume. This suggests that there is ample room for other brands to win customers over.

Consumer Interest in EVs

Consumers are being won over by EVs. Electric vehicles controlled 6.7 percent of the American automotive landscape between January and May 2023, up from 5.2 percent during the same period in 2022. This is despite the average EV costing $65,381, or $17,489 more than the average internal combustion vehicle.

Young buyers and shoppers looking for a luxury vehicle are the ones who are the most likely to shop for an EV. Among the youngest buyers surveyed, 25-34-year-olds, 75 percent were considering an EV, and 88 percent of 35-44-year-olds were interested in the tech, as compared to just 27 percent of 55-64-year-olds.

Consumer Expectations for EVs

A large proportion of shoppers interested in EVs have some pretty big expectations of them. The study found that 23 percent of shoppers want a vehicle that costs less than $30,000, and 49 percent want one that can go more than 300 miles (483 km).

However, there is also a significant educational gap that the industry will need to collectively bridge to better inform consumers of the realities of the current market, particularly around availability, pricing, and range. Shoppers considering making an EV purchase in the near future might be a bit blindsided if they don’t take the time to do their research.

The Opportunity for Automakers and Dealers

The fact that younger and more luxury-oriented consumers are considering an EV for their next purchase presents a once-in-a-lifetime opportunity for automakers and dealers to tap into these highly desirable demographics. As more established automakers enter the EV market and compete with Tesla, brand loyalty patterns may shift back towards their previous tendencies. However, for now, the EV market remains an opportunity for conquest.