Strategic Vision (SV) announces the results of its annual Brand Equity Index™ (BEI), providing critical insights into automotive brand’s health by combining the owner and non-owner perspectives of brand values, perceived quality, and future consideration. BEI explains how strong brands (with high BEI) can make sales with average products while weaker brands struggle even with empirically superior products. Tesla is a perfect example of a brand with strong BEI which generates interest and sales which has lost ground in recent months.
Tesla’s brand image is heavily tied to its CEO, Elon Musk. Musk’s initial interest and acquisition of Twitter, followed then by his decisions to reinstate banned users, lessen restrictions, direct layoffs, and new demands with remaining employees have all had a direct impact on his image and that of Twitter and Tesla.
“In the past year, we have seen Tesla’s brand lose equity across every brand value, from foundational Safety to Refinement. In addition, the greatest drops for Tesla in its brand DNA are Excitement, Fun to Drive, Security and Sophistication,” reports Strategic Vision President, Alexander Edwards. “These problems are magnified in that battery electric vehicles (BEVs) are more often purchased by self-identified Democrats who have generally opposed Musk’s actions with Twitter. It will become more difficult to sell Tesla vehicles as the narrative of Twitter makes the vehicles seem less Fun and alienates the primary buyer. The BEI results show Tesla’s loss in the strength of its core DNA, which provides other brands opportunities to capture BEV sales,” adds Edwards.
The Brand Equity Index™ is the only metric that measures the value-emotions consumers associate with each brand. BEI incorporates the voice of new-vehicle buyers asked to rate automotive brands — both those they purchased and those they did not — in three key areas that ultimately add up to the overall BEI score. The first key area is the “Believed Brand Quality,” often seen as the reliability and future durability expected of the brand.
The second area is “future consideration” of brands they “definitely,” “might,” or “would not” consider as a future purchase. The final section focuses on identifying the brand value-emotions, or the brand DNA, connected to what the brand stands for among both owners and non-owners. These value-emotions start with foundational values such as perceived Safety, Trust and Confidence and move to the higher value-emotions such as Fun, Prestige and Refinement.
“As noted by BEI measures, the strongest brands today are Toyota, Honda, Lexus, and Mercedes-Benz. BEI also shows which brands will increase their market share tomorrow, such as Genesis and Subaru, especially as those owners advocate and invite others to learn more about what their brands stand for,” says Christopher Chaney, Senior Vice President of SV. “This will become more critical as automotive companies are scrambling to position themselves for greater sales in the post pandemic environment. For example, Tesla’s weakening brand DNA will allow consumers to consider BEVs offered by those with stronger DNA. Tesla should be concerned about why Mercedes-Benz returned to the top BEI position in its category.”
Stellantis Group brands ranked at the bottom in their price categories. While each of the Stellantis brands had key strengths such as Alfa Romeo being highly rated in Excitement and Refinement by their owners, those who did not own the brands had different perceptions and were less likely to consider these brands in the future. As Strategic Vision analyst Ryan Ruiz explains, “It is the lack of foundational Security why Stellantis brand consumers do not move from initial interest to real consideration. ValueCentered psychology shows that a strong foundation in Security is essential to experience excitement. Vehicles that fail to deliver on Security will be at the bottom of their respective price groups.”
BEI results and a sample of some of the associated metrics are as follows:
|Brand Equity Index (BEI) Leaders
|Brands $34K and under
|Brands $35K – $46K
|Brands $47K – $55K
|Brands Over $55K
|Brand Values by Owners
|Fun to Drive
|Brand Values by Non-Owners
|Fun to Drive