The Demise of the Tesla Brand

 

I had always admired Elon Musk and what he had accomplished. And I always wanted to own a Tesla car. I decided that the Model S was out of my price range, so I waited for the Model 3. I was one of the first ones to purchase a Model 3 seven years ago. And I am considering getting my next Tesla Model 3 soon. 

Having said all of this, I want to speak to the demise of the Tesla brand. Since Elon Musk funded a significant portion (at least $277 million according to one source) of Donald Trump's US presidential campaign and is now a "special government employee" leading the Department of Government Efficiency (DOGE) under Donald Trump, the Tesla brand has been under attack. 

Why? Tesla's early adopters wanted to support Tesla's EVs at least partially to combat climate change. They viewed climate change as an existential threat and purchasing a Tesla vehicle as something they could do to reduce that threat in some small way. When Elon Musk supported Donald Trump, who has denied climate change, is hostile toward Electric Vehicles (EVs) and has been quoted as saying "Drill, baby drill," Tesla's founder and his motivations became suspect and out of sync with Tesla's unique value proposition,

People then began to conjecture that Elon Musk's end game in the EV market wasn't as altruistic as it first appeared but rather a brilliant ploy to "own" the fuel supply of the growing EV market through Tesla's Supercharger network, which has now been opened up to most other EV brands. That may also be the reason he shared his EV technology with other automotive manufacturers, so that they would be able to use the same charging technology. 

Then one realizes that the Harris administration was very likely to have continued to pursue the Biden administration's investigations of and legal matters against Elon Musk's business interests, something the Trump administration would not likely do. Plus, there are numerous opportunities for increased government contracts for Elon Musk's businesses under the Trump administration.

On top of that is the impact of DOGE's draconian cost reduction measures that have shown a total disregard for functional consequence or human suffering.

Tesla stock hit a new high by the end of 2024 but has declined by 31% since then and some analysts are predicting that it could plunge another 50% over the next year or so. European sales of Tesla's are plunging from 2024 to 2025, because Europeans are tiring of Elon Musk's far right diatribes among other reasons.

Source: https://electrek.co/2025/02/03/tesla-tsla-sales-are-dropping-like-a-rock-in-europe-but-its-not-just-because-of-elon-musk/

California is the biggest market for Teslas in the US accounting for 35% of all Teslas sales, however Tesla's share of EVs in California dropped from 60% to 52% from 2023 to 2024. This corresponds with a double digit decrease in Tesla vehicle sales from one year to the next. And this is despite a growing EV market in California. 

Since Elon Musk's Roman salute, anti-Nazi activists have begun calling Teslas "Swasticars" and people driving Teslas have been warned that anti-Nazi activists have begun vandalizing Teslas for this reason.

Several of my friends own Teslas. Some of them are so fed up with Elon Musk that they intend to sell their Teslas and purchase other vehicle brands even though they all admit that they have been very pleased with their Teslas. Country music star Sheryl Crow announced on Instagram that she had sold her Tesla to protest Elon Musk's involvement in President Donald Trump's administration, and donated the earnings to NPR.

All of this speaks to the cognitive dissonance that occurs when a company's founder tarnishes the image of the brand he or she created due to behavior that goes against the brand's raison d'être and unique value proposition. Elon Musk's more recent behavior and rhetoric have worked against what Tesla's admirers thought the Tesla brand was all about. 

Now, back to my next car purchase, if it is a Tesla, I will likely get it at a great deal given the state of the Tesla brand, especially if I purchase a used Tesla. (The used EV market tends to be soft anyway given the concern about battery life and cost of replacement.)

This is a cautionary brand story that may go down in the history books and marketing students may be reading about this for years to come. 

Brand Research & Brand Positioning e-learning Courses

 

During February and March of 2025, I am offering "Brand Research" and "Positioning Your Brand to Win" e-learning courses for $35 instead of the normal $150, for a $115 price discount. This very low price will only be available for these two months. These courses are intended for beginning through intermediate study of the topics. They include videos, links to online blog posts and articles, numerous examples, tools, templates, exercises and a quiz. You will emerge from these two courses with a much better understanding of these topics.

• Brand Research
• Positioning Your Brand to Win

Marketing Needs Assessment

 

In conjunction with BrandForward, Inc., we are conducting a marketing needs assessment. If you are a marketing professional or business executive of any type who is aware of your organization's marketing needs, please help us quantify those needs so that we can report those needs back to you in a subsequent blog post. Your response will be combined with other responses and your identity will remain anonymous.  It is estimated that it will take you 6 minutes or less to complete.

Here is the LINK to the survey. 

Thank you in advance for helping us report the most pressing marketing needs back to the marketing community.

Generic Market Segmentation

 

We at BrandForward have conducted dozens of market segmentation studies for our clients, some very sophisticated testing over fifty attitudinal statements with ending samples as high as 5,000 consumers. The sophisticated studies have employed cluster analysis, factor analysis, multi-variate regression analysis and other advanced statistical techniques. These sophisticated studies identify the top few market segments for a brand together with the key messages for each.

But I am not writing about that here. I am writing about the four generic market segments:

• Price driven consumers
• Convenience driven consumers
• Brand driven consumers
• Category enthusiasts

The two scarce commodities in most people's lives are time and money. One is very blessed if he or she has an abundance of both. But most people have one or the other or neither of these. This makes the price and convenience driven segments intuitively obvious. The brand driven segment prefers a specific brand, is happy with that brand and does not want to go to the effort to discover new brands, while the category enthusiasts love the category and are constantly in search of the latest products and brands in that category.

Historically, price driven consumers have been between 20-25% of the overall market, but in the last decade or two, and especially lately, that segment has grown to 50% of the market. Recent research shows that 50% of consumers in the US have indicated that they have become more price sensitive. And with the increasing bifurcation of our society into a very large group (80+% by some measures) whose wages had not been keeping up with inflation (while the top income groups are becoming richer), this may only get worse. 

This bodes poorly for brands because the only thing that separates brands from commodities is relevant differentiation that can command a price premium. Very few brands can win by claiming lowest price. And trying to "own" that segment is a downward spiral, especially regarding profit margins and overall profits. 

It is well known that a brand's products sold in big box stores (Walmart, Home Depot, etc.) are not of the same quality as seemingly identical products sold directly to plumbers, contractors and end consumers at specialty stores. For instance, my wife and I recently bought a well-known supposedly high quality branded kitchen faucet at our local ACE Hardware store only to find out that it kept on coming loose from our counter due to a plastic washer. It also had a plastic wand. We turned around and replaced it with a kitchen faucet that we bought directly from the manufacturer. It had a brass washer and a solid metal wand. It does not come loose and it will last much longer. We discovered the same when we bought our Cub Cadet riding lawn mower. We bought ours at a speciality store. It was a higher quality than supposedly the same product that we could have bought at Home Depot. 

Brands will increasingly have to figure out how to address mass markets, which have become much more price sensitive. On the other hand, the top 5% and 1% are seeking out the highest quality in luxury categories. And these products are highly profitable. 

Here are some related articles and blog posts that you might find useful:

• Market Segmentation
• Market Segmentation
• Share of More/Less Price-Sensitive Consumers
• Increasingly Bifurcated Consumer Market
• Evolution of Luxury Brands
• Luxury Brands and Exclusivity
• Purchase Patterns of Wealthy Households
• Brands as Social Status Symbols
• Luxury Brands Quiz

A Mosaic of Branding Strategy Source's Blog Posts

 

Since 2014, Branding Strategy Source has published 710 blog posts. Today, I have included links to twenty of its more unique posts for your reading pleasure.

• Animals in Advertising
• Brands that Harken Back to Simpler Times
• Brand Advertising and Humor
• Brand Problems of Their Own Making
• La Posada Hotel
• Brands as a Path to Self-Esteem
• Historical Brands in America
• Identifying Riding Lawn Mower Brands by Color
• Purchase Patterns of Wealthy Households
• Branding Water
• 21 Stories for Scouting
• When the Buzz is Gone
• Creating "Category of One" Brands
• Proactive Publicity
• How to Remain a Leading-Edge Marketer Throughout Your Career
• The Essence of Marketing in One Paragraph
• Retro Brand Imagery with Sexual Overtones
• Do you know how non-customers perceive your brand?
• Brands and Memory Triggers
• Brands, Mystery & Exclusivity

Your Brand is the Gestalt of Its Touch Points

 

While marketing professionals historically thought of the brand and its positioning as being primarily the result of its identity system and marketing communication, because the brand is owned in the mind of its customers, it is really the gestalt of all of its touch points. Brand managers have been talking about customer journey mapping and customer touch point design for the past two decades. However, it would behoove marketing professionals to occasionally revisit all of the ways their brands make an impression on the customer.

Does the brand's website make it easy for customers to reach someone at the brand if they have a question or a problem? Is the customer support telephone system easy to navigate? Are customers able to have their problems solved quickly or do they go through an annoying seemingly infinite loop of "press one for x, press two of y, press three for z"? How well trained are the brand's front-line employees? Do employee objectives encourage good customer service or are they more sales or profit driven? Have you ever waited an inordinate amount of time to be served at the counter of fast food restaurants or cafes because the front line employees are measured on drive-through efficiency, not on-the-other-side-of the counter customer service? Or how about filthy restrooms? Or unhygienic front line employees? Or user's manuals that are unclear and difficult to follow? 

What does the brand's distribution strategy say about the brand? How about its pricing? Its product design? Its package design? How accessible is the brand? What value-added services does the brand offer? Does the brand provide competent technical support? What payment methods does it accept? How fast can it be shipped to one's house? How are returns handled? What do customer testimonials say? What do third party product reviews say? Does the brand have third party endorsements? Is the brand known through its community involvement or its charitable support? Does the brand publish a newsletter? Is its marketing automation well-thought-through and relevant? What is its social media presence like? Do YouTube videos feature the brand? Are customers acquainted with the brand through its sponsorships? Have customers seen the brand placed in movies or television shows? What is word-of-mouth on the brand? What are customers' family, friends and co-workers saying about the brand? Do the company's computer systems support easy purchase and use of the brand? Is the brand in the news? Is the brand news positive? 

Yes, brand identity and marketing communication are important in the management of brand perceptions, but so to are overall company mission, vision and values, system and process design, user manual clarity, organization design, employee hiring criteria, employee training, common measures, individual job performance objectives, employee reward and recognition programs, product design, customer journey design, marketing automation design, brand-community involvement and company charitable giving among other company, brand and product elements that effect customer perceptions of the brand.

All of this speaks to the CEO being the ultimate brand manager, with the designated day-to-day brand manager reporting in at a very high level in the organization so that he or she can affect brand perception levers outside of just brand identity and marketing communication.