Tesla Faces Decline as Former Enthusiasts Hesitate to Drive Their Cars
The German electric vehicle market experienced a significant downturn in the past year, with Tesla being notably affected. This decline is partly attributed to the image of CEO Elon Musk, which has raised concerns among some consumers.
Recent data from the Kraftfahrt-Bundesamt reveals that Tesla and Opel were hit hardest in a shrinking German market for electric vehicles. In contrast, competitors such as Volkswagen, BMW, and Mercedes have managed to expand their market shares.
Tesla's new figures are particularly striking, as no other brand has seen such a steep decline in electric vehicle sales. The number of new registrations dropped by over 26,000, bringing the total to nearly 38,000 vehicles, which corresponds to a market share of 9.9%. This decline has caused Tesla to fall from second to third place in the German market for battery electric vehicles, a stark contrast to its leading position in 2022.
Experts attribute this downturn, in part, to an image problem linked to Musk's political activities. His support for Donald Trump, the potential future U.S. president, has led to a shift in how some consumers perceive the brand. Marketing expert Stefan Wegner noted that some environmentally conscious drivers may now feel embarrassed to own a Tesla due to Musk's controversial public persona, coining the term 'Tesla shame' to describe this sentiment.
Patrik Schneider, a Tesla owner, shared his experience of being labeled as a 'Trump supporter' at a gas station, illustrating the shift in public perception. In response, he has begun selling stickers online that express disapproval of Musk, allowing other Tesla owners to distance themselves from the CEO's controversial reputation.
Advertising specialists recommend that Tesla adopt more traditional advertising strategies to recover from this slump. Martin Fassnacht, a marketing professor, suggested that a clear separation between Musk's persona and the Tesla brand could help restore the company's original appeal. He emphasized the need for a marketing campaign that acknowledges Musk's influence while reestablishing Tesla's identity.
While Tesla struggles, rival brands are seizing the opportunity to gain ground in the electric vehicle sector. BMW has notably increased its new registrations by over 1,600, totaling more than 40,000, which has allowed it to reclaim the second position in the market, raising its share to 11.1%. Other brands like Skoda, Seat, Volvo, and Porsche have also reported significant increases in their new registrations and market shares.
Volkswagen has solidified its leading position with a market share increase from 13.5% to 16.3%, despite a reduction in new registrations to 62,000 vehicles. Similarly, Mercedes gained market share, moving from 7% to 8.9%, even as its new registrations fell to 34,000. The overall trend in the German electric vehicle market indicates a competitive landscape where Tesla must adapt to retain its relevance.
