Tesla's recent rebound suggests brand trust and price incentives have overshadowed political backlash.Benoit Tessier/Reuters
Months after Tesla TSLA-T owners across Canada dashed to sell their vehicles in the wake of backlash against the brand’s controversial leader, the carmaker’s market share and sales seem to have rebounded.
Data provided to The Globe and Mail by the vehicle reseller Clutch show Tesla Inc.’s market share in the used vehicle market fell sharply in early spring. That’s when company chief executive officer Elon Musk became a chainsaw-wielding fixture in U.S. President Donald Trump’s administration, spearheading firing sprees across government agencies and axing foreign aid.
The brand’s market share in Canada’s used electric-vehicle market fell from 36 per cent to 27 per cent in March, and down to 21 per cent in April.
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As Tesla customers rushed to sell the car, the number of offers on Clutch for Tesla Model 3s doubled between January and March. (Though they weren’t always successful in finding buyers.)
But Tesla’s market share has since spiked back to 37 per cent, reclaiming its prior lead among EV shoppers. The rebound suggests that brand trust and price incentives may have overshadowed political backlash in the long run, although it’s far from all good news for the carmaker.
“It feels like consumers’ memories are short and everything that was fuelling the significant sell-off in Teslas back in March has largely normalized for the most part,” said Clutch chief executive officer Dan Park in an interview. “Both prices and volume.”
Mr. Musk’s jabs at Canada’s sovereignty and his friendship with Mr. Trump, along with cuts to EV subsidies and federal rebates across Canada, had dealt multiple blows to the brand’s image last spring.
EV charging stations across Canada and abroad had been set ablaze and Tesla dealership lots vandalized. Drivers who spoke with The Globe at the time said they felt pressure from friends and colleagues to sell.
But in June, the short-lived bromance between the world’s richest man and the U.S. President crumbled, with Mr. Musk firing a barrage of insults at the President.
Mr. Trump threatened to slash federal contracts that sustained some of the billionaire’s business interests.
In addition to Mr. Musk loosening his ties to the U.S. President, Tesla Canada has recently been exonerated of fraud allegations from earlier this year after a Transport Canada investigation.
Today, Teslas are seeing higher sales volumes, suggesting a rebound in consumer demand despite industry-wide price declines, Mr. Park said. The company’s market share and sales are back to where they were in early January.
Prices are stable, even slightly up – about $200 higher than the start of the year, he said.
South of the border, the picture is similar.
“We have seen in May and June a significant reversal where the brand is moving up again,” said Thomas Libby, an auto analyst with S&P Global Mobility. “The brand’s market share of EV went up, brand loyalty has gone up.”
Mr. Libby attributes at least some of the shift to the carmaker‘s deals and incentives, including low lease rates and low annual percentage rate financing.
“They’d have programs like a US$199-a-month lease for three years,” he said. “For the Model 3 and the Model Y, there are incentives that bring those models equal to or close to the same [prices] as cars with a gasoline engine.”
But while Tesla may show signs of having recovered from the backlash last spring, challenges persist in the EV market. The loss of federal and provincial rebates and uncertainty around range – how long an EV can travel on a full battery – as well as the lack of charging infrastructure dampening demand continue to create headwinds, Mr. Park said.
Used Tesla prices have seen double-digit year-over-year declines for the past couple of years, said Baris Akyurek, AutoTrader’s vice-president of insights and intelligence.
Used Model Y prices, for example, dipped around 15 per cent year-over-year in July. Though Mr. Park said the average age of a used Model Y increased year-over-year, thus contributing to the decreasing prices.
David Robins, senior manager and head of Canadian vehicle valuations at Canadian Black Book, said the wholesale price for a 2022 Model Y Long Range is down about $2,900 over the past six months, though price cuts may also be driving more new buyers to consider the vehicle.
For him, the figures suggest that Tesla hasn’t truly rebounded in the full sense of the word. Instead, it may have simply “found a new equilibrium,” with the entire EV sector struggling.