In a surprising trend, more than half of Teslas traded in the United States are being exchanged for gas-powered vehicles. According to data from Edmunds, from January to July 2024, 51% of used Teslas were traded in for gas cars, while only 32% were swapped for another electric vehicle (EV). This statistic has raised eyebrows, given Tesla’s reputation for innovation and sustainability.
Sam Evans’ Insight
Sam Evans, known as The Electric Viking on YouTube, expressed his surprise at this trend. He noted, “I can’t understand why you would trade in your Tesla for a gas car after you just saved all this money by not having to pay for gasoline, not having to pay for petrol Diesel, and not having to drink in the fumes”. Evans highlighted the health risks associated with gas-powered vehicles, such as the harmful emissions that can contribute to lung cancer, even among non-smokers.
Historical Context and Trends
Looking at historical data, the trend of trading Teslas for gas vehicles, though still significant, has actually been improving. In 2019, a staggering 71% of Teslas traded in were for gas cars. This figure has gradually decreased each year: 72% in 2021, 66% in 2022, and 55% in 2023.
Strong Brand Loyalty
Evans emphasized Tesla’s strong brand loyalty, which remains one of the highest in the industry. He pointed out, “Tesla actually has the highest brand loyalty of any brand in the world… their brand loyalty number is about 70%”. Despite this loyalty, the shift towards trading in Teslas for gas vehicles persists, albeit at a declining rate.
Industry Competition and Consumer Choices
Will Kaufman from Edmunds provided additional context, noting that five years ago, legacy automakers did not have vehicles that could compete with Teslas. This has changed, and more people are now trading their Teslas for EVs from traditional automakers. “Back in 2019, a whopping 71% of Teslas were traded in for gas cars, while 18% were traded in for hybrids. Only 10% were traded for another EV”.
A More Popular Choice
Kaufman also highlighted that plug-in hybrids (PHEVs) are becoming a more popular choice for those trading in their Teslas. He explained, “PHEVs make up a pretty small percentage of total cars sold… but this data shows the pipeline is effectively in the other direction. If you’ve bought an EV, you’ve probably installed a charger, so you’re already set up to take advantage of a PHEV”.
Challenges and Opportunities for Tesla
The increasing competition from legacy automakers poses both a challenge and an opportunity for Tesla. Evans noted that despite the intense competition, Tesla remains the only manufacturer outside of China that is mass-producing EVs profitably. He commented, “I think Tesla are doing incredibly well to pull that off… we should be saying thank you very much Tesla for forcing everyone to bring down the cost of electric cars”.
“Standing Still”
However, Kaufman pointed out that while Tesla has been innovative, some perceive the company as “standing still” compared to the advancements made by legacy automakers. He cited the refreshed Model 3 Highland, which made only minor changes to the existing model, as an example of this perception.
“Biased Data”
People in the comments shared their thoughts: “I live in Thailand. I have never heard an EV owner, regardless of it being Tesla, BYD, GAC, MG, ChangAn, going back to ICE. Our next car will be EV.”
Another commenter added: “After driving a Tesla you never want a gas car”
One person said: “Edmund’s data is probably deeply biased. I imagine they’re only looking at dealership data, which would skew the data towards ICE. Legacy makers don’t offer many good EVs, so if a Tesla is being traded at a dealership, it would make sense that it’s traded for something on the lot.”
Startling Data
The data indicating that 51% of Teslas are being traded in for gas vehicles is indeed startling. It reflects a complex interplay of consumer preferences, market dynamics, and the evolving competitive landscape. While Tesla continues to maintain strong brand loyalty and profitability, the company faces ongoing challenges from both consumer behavior and intensified competition from legacy automakers. As the EV market continues to evolve, it will be interesting to see how these trends develop and how Tesla adapts to maintain its position as a market leader.
Consumer Behavior
What do you think? What factors do you think are driving Tesla owners to trade in their EVs for gas-powered vehicles, despite the environmental and economic benefits of EVs? How can Tesla and other EV manufacturers differentiate themselves further to reduce the number of trade-ins for gas vehicles? What role do economic factors such as the cost of ownership and resale value play in the decision to trade in a Tesla for a gas vehicle?
For additional insights, view the full video on The Electric Viking’s YouTube channel here and read the article on Edmunds’ website here.
