Tesla's Brand Value Takes a Hit: What's Going Wrong?

Tesla's brand value has taken a significant hit in 2025, dropping by 36% to $27. 61 billion. This is the third year in a row that the company has seen a decline in brand value, according to Brand Finance. The drop is attributed to a mix of factors, including product stagnation, pricing pressure, and leadership distraction. One of the main issues is that Tesla's lineup has aged relative to its rivals. The company's vehicles remain expensive in a market that is increasingly crowded with cheaper electric alternatives. Additionally, Elon Musk's growing presence in geopolitics has pulled focus away from the auto business, leading to what Brand Finance CEO David Haigh describes as continued "overreach. " The decline in brand value is not just a financial issue, but also a matter of public perception. Tesla's scores on measures tied to reputation, recommendation, trust, and coolness have fallen across many regions. The declines have been most pronounced in Europe and Canada, markets where consumer sentiment has cooled more sharply. In the U. S. , Tesla's recommendation score has dropped significantly, from 8. 2 to 4. 0 out of 10 in just two years. This suggests that mainstream buyers are becoming more hesitant about the brand. However, brand awareness has continued to rise in many markets, indicating that familiarity alone is not enough to translate into enthusiasm.Despite the decline in brand value, Tesla has seen some bright spots. The company's U. S. loyalty score has climbed from 90% to 92% in 2025, signaling that existing owners still plan to stick with their vehicles. However, this loyalty has not been enough to offset weaker sentiment among potential buyers. As Tesla's brand has weakened, rivals have gained ground. BYD, for example, has emerged as the fastest-rising automotive brand in the rankings, posting a 23% increase in brand value to $17. 29 billion. Toyota, Mercedes-Benz, Volkswagen, and Porsche all ranked ahead of Tesla, with Toyota leading the sector at an estimated $62. 7 billion. The contrast between Tesla's standing with consumers and its standing on Wall Street is growing. Tesla stock swung wildly through 2025, with optimism fading as Musk's political involvement intensified. The loss of a federal tax credit for electric vehicle purchases added further pressure on the business. However, the stock recovered later in the year following the launch of a ride-hailing app and a pilot Robotaxi service in Austin, Texas.