Tesla, once a juggernaut in the electric vehicle (EV) industry, is facing significant challenges as its brand value declines under the leadership of Elon Musk. The company's brand value decreased dramatically from $58.3 billion at the beginning of 2024 to $43 billion, marking a second consecutive annual decline of 26%. This reduction in brand valuation highlights the complex relationship between Tesla's public perception and Musk's influence. While some view Musk as a visionary leader, others express reservations about his impact on the company.
Brand Finance conducted an extensive analysis involving approximately 175,000 survey respondents worldwide, which included insights from 16,000 individuals specifically sharing their views on Tesla. The results illuminated a stark decline in Tesla's recommendation score in the U.S., which fell from 8.2 out of 10 to 4.3. In Europe, Tesla's consideration score similarly dropped from 21% to 16% on average between 2024 and 2025. Meanwhile, Tesla's market share in the U.S. EV sector decreased to 49% from 55% a year earlier.
Elon Musk's dual role as Tesla's CEO and a polarizing public figure contributes significantly to the company's challenges. David Haigh of Brand Finance noted:
"There are people who think he's wonderful, but many that don't," – David Haigh
This perception of Musk impacts Tesla uniquely due to the tight association between the company's brand and its leader. Haigh emphasized the potential repercussions of this dynamic:
"It is very clear who the CEO is, that this person is in charge and their behavior will impact the company's reputation," – David Haigh
Despite these challenges, Tesla maintains a high loyalty score of 90% in the U.S., indicating strong customer retention among existing users. However, this does not counterbalance the broader concerns about brand perception and market share.
Toyota emerges as the most valuable automotive brand with a valuation of $64.7 billion. This positions Toyota ahead of Tesla, highlighting the competitive landscape where Tesla once dominated. The drop in Tesla's brand value also coincides with the declining brand awareness of X—formerly Twitter—a platform closely associated with Musk, whose brand value plummeted by 26% to $498 million from $673 million.
"Twitter was very well known, very well-liked and attracted a lot of advertising," – David Haigh
Musk's involvement in politics adds another layer to the situation. He contributed $277 million to support Trump and other Republican candidates during their campaigns. This political engagement may have influenced public perception of Musk and, by extension, Tesla.
Haigh pointed out:
"Overnight, when he changed it to X, according to our data, that reduced the value by about 75%. It went right down and has continued to go down," – David Haigh
Tesla's reputation and brand value are intertwined with its product offerings. Without introducing new products that captivate consumer interest and addressing the controversies surrounding its leadership, Tesla risks being perceived as a company past its peak.
"Unless Tesla can come up with a whole range of new products that will really excite consumers, and unless they can mitigate some of the antagonism caused by their leader, they will be seen as past their peak and will begin to go down," – David Haigh
While SpaceX enjoys familiarity among approximately 45% of U.S. survey respondents, this recognition does not necessarily buffer Tesla from its current struggles. Simple awareness of the X brand fell from 94% to 78% internationally, underscoring the broader challenges faced by brands associated with Musk.