Tesla’s Brand Reputation Slumps 50 Places in a Brand Reputation Survey

Elon Musk’s controversial statements and business maneuvers may have contributed to the decrease. Tesla’s sales and talent acquisition might suffer if its reputation deteriorates.

Tesla’s brand reputation has taken a hit, according to a recent survey of top brands. While it still retains customers better than other automakers, its ranking dropped significantly from #11 to #62. This drop in reputation could have negative implications for sales and talent acquisition. However, Tesla CEO Elon Musk maintains that demand for Tesla’s products exceeds supply and that the company remains a top choice for graduating engineers.

It’s important to note that a company’s reputation can improve or worsen in different areas simultaneously. Tesla may still be seen as a leader in automotive innovation and exciting work prospects, but it has faced criticism in areas such as workforce equity, corporate governance, worker rights, and cultural inclusion. Additionally, some of Elon Musk’s tweets may have negatively impacted the company’s reputation, despite the perception that Tesla is improving and maturing.

According to the Axios Harris Poll, both FTX and Tesla experienced significant reputational declines. Tesla’s drop from 11th place in 2022 to 62nd place in 2023 was particularly noteworthy. Its reputation quotient (RQ) score also decreased from 79.5 to 74.3.

Elon Musk recently criticized Environmental Social Governance (ESG) after Tesla received a lower ESG score than Philip Morris International, the maker of Marlboro cigarettes. Musk referred to ESG as “the devil” and questioned how cigarettes, which cause millions of deaths each year, could be considered a more ethical investment than electric cars. S&P Global, the firm responsible for determining ESG scores, analyzed 8,000 companies based on various factors, including climate strategies, labor practices, stakeholder engagement, business conduct codes, and board diversity.

In terms of ESG rankings, cigarette businesses and oil giant Shell outranked Tesla. British American Tobacco achieved a score of 88, Philip Morris International scored 84, and Shell scored 41.

Chart Credit: S&P Global

Tesla’s score of 37 was determined by adding up its environmental, social, and governance scores of 60, 20, and 34, respectively.

These ESG results raise questions about where Tesla may be falling short. Despite its mission to accelerate the world’s transition to sustainable energy and its efforts to reduce emissions through electric vehicles, the company’s reputation has suffered. While Tesla dominates the electric vehicle market, the brand’s reputation decline seems to stem from factors related to its character, trust, and citizenship.

The Axios Harris Poll 100 further reveals that Tesla’s reputation decline is not linked to its actual vehicles or charging network. The company scored well in the products and services criterion, with a respectable 81 points. Instead, it faltered in the areas of character, trust, and citizenship, indicating a public relations challenge.

It’s worth noting that Tesla’s survey scores vary greatly across different criteria. Its lowest score of 68.1 is in citizenship, while its highest score of 81 is in products and services. Culture and ethics also received relatively low scores of 70.5 and 71.3, respectively. The exact reasons behind Tesla’s decline in these specific areas remain uncertain, but speculation suggests that controversial comments, business decisions, and concerns over self-driving software reliability and data breaches may have contributed.

In conclusion, Tesla’s brand reputation has experienced a significant decline, with the company’s ranking dropping from 11th to 62nd place. While it continues to attract customers, this decline could impact sales and talent acquisition. Tesla’s reputation decline is not linked to its electric vehicles or charging network but rather to factors related to character, trust, and citizenship. Controversial comments and business moves by CEO Elon Musk may have also played a role. Furthermore, Tesla received a lower ESG score compared to cigarette companies and Shell, raising questions about its performance in environmental, social, and governance areas.

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