- Tesla brand loyalty is crumbling.
- Trade-ins of Teslas increased 250% year-over-year nationwide in March.
- Used prices are expected to begin to cave to increased supply in the coming months.
What would you do if your favorite burger joint fired its kitchen staff, turned into a salad bar where you can only pay with crypto, and started playing that same song (you know the one) that everyone hates on repeat? You'd probably stop going, unless you're a huge Imagine Dragons fan who happens to also love both salad and crypto. That's kind of like what's going on at Tesla right now.
Tesla is in the midst of a customer exodus. According to new data from Edmunds, folks are leaving the fleet faster than ever, with trade-ins up 250% year-over-year in Q1 2025. Yes, that's not a typo. Two-hundred and fifty percent.
That means more and more Tesla owners are turning in their once-loved electric chariots for something else. According to the data, Tesla trade-ins made up 1.4% of all Model Year 2017 and newer cars traded in last month. That might not seem like a lot on its own, but keep in mind that same figure was just 0.4% in March 2024, which is what brings that figure to a whopping 250% increase year-over-year.
So in the grand scheme of things, it may not quite be an ocean of Teslas flooding the used market, but that drip of supply has turned into a bit of a trickle. Still, record trade-in volume tells us something about where Tesla fits in the American car psyche right now—as you can expect, it's not all glowing.
"Brand loyalty is becoming a bigger question mark as factors such as Elon Musk’s increasing public involvement in government, Tesla depreciation concerns and its increased saturation in major metro areas leave some longtime owners feeling disconnected from the brand," said Jessica Caldwell, Edmunds’ head of insights. "With more Teslas on the road than ever, the brand’s initial street cred may be eroding for some early adopters who once prized its vehicles as a status symbol."
Edmunds' data shows that considerations for car shoppers looking at a Tesla as their next new vehicle purchase fell to just 1.8% in February, the lowest point on record since October 2022. For context, the brand peaked in November 2024 right around the U.S. presidential election. Since then, but buzz has dimmed and that's showing in shopping behavior.
New Teslas are also being cross-shopped even less. For those folks who still have a Tesla on their list, the overall ranking on that list seems to have fallen, too. That's especially true for Tesla's bread and butter (the Model Y) which is now losing ground to similar EVs like the Ford Mustang Mach-E, Hyundai Ioniq 5, Kia EV6 and Kia EV9, according to Edmunds.
If that wasn't enough to convince you, General Motors would like to have a word. Speaking to InsideEVs, Chevrolet claimed that Teslas represented 11% of all trade-ins for its EVs in March.
That number could continue to rise as new Teslas age. Edmunds predicts that Tesla could be in for a rude awakening as owners pay down their car notes and start looking for alternatives from other brands:
"The reality is many consumers are not in a financial position to replace a newly purchased vehicle immediately—especially in today’s market, where used EVs face significant depreciation compared to their ICE counterparts," Caldwell said. "Unlike switching smartphone brands or streaming services, replacing a car is a major financial decision, and even the most disillusioned Tesla owners will likely hold onto their vehicles out of necessity."
Interestingly, the used market appears to be unaffected, at least for now and only in the short term. Edmunds says that there has not been a huge shift in pricing or interest of Tesla vehicles within the used buying market, although that could just be the delay between trade-ins leaving the hands of their owners and actually hitting the dealer lot.
Could things change as Musk readies to leave D.C.? Sure, but that's a big unknown. Brand damage has already been done, as evident by global protests and vandalism against Tesla vehicles, Superchargers, and showrooms. How the brand aims to swing back is anyone's guess.
