Toyota Leads in Loyalty — Driven by the RAV4
Among automakers, Toyota remains the loyalty leader. The brand posted a 65.4% overall loyalty rate, with its popular RAV4 compact SUV driving an impressive 69.4% loyalty rate on its own. Nine other brands also scored above the mid-year industry average of 53.3%. By contrast, Tesla experienced a notable drop. Once at the top in 2024 with a 60.9% loyalty rate, Tesla has slid to 7th place at 54.2% in the first half of 2025. Historically, 88% of Tesla owners replacing an electric vehicle (EV) have stayed with Tesla. That figure has now fallen to 75%, with more Tesla drivers turning to competitive EV models from other automakers.
Tariffs and Supply Chain Strain
The first half of 2025 has also been shaped by rising geopolitical and economic pressures. The looming threat of higher tariffs is adding strain to U.S. auto manufacturing supply chains. The industry depends heavily on parts, semiconductors, and complete vehicles sourced from Canada, Mexico, and China. In anticipation of possible cost spikes at both the production and retail level, automakers are seeking alternative sourcing and adjusting operations. These moves aim to keep assembly lines running and inventories steady in an environment marked by consumer uncertainty. Geopolitical tensions have also disrupted the flow of critical EV components, including batteries and raw materials such as lithium and nickel. Such vulnerabilities have contributed to production delays, inventory shortages, and price volatility—factors that can directly affect brand loyalty as frustrated buyers look elsewhere.
Slower-Than-Expected EV Adoption
The transition to electric vehicles in the U.S. has been slower than forecast. While EV sales are still growing, automakers face a moving target shaped by changing federal policies, fluctuating emissions standards, reduced incentives, and evolving state regulations. For many brand-loyal consumers, this uncertainty means sticking with internal combustion engine (ICE) models rather than switching to their brand’s EV offerings. Price remains a major factor: according to Cox Automotive, the average transaction price (ATP) for EVs hit a record $59,255 in April 2025 before dropping slightly to $57,236 in May. In response, automakers increased EV incentives by 19.4% that month to help offset sticker shock. However, high EV prices may encourage loyal buyers to purchase an ICE or hybrid from their preferred brand—or, if affordability remains out of reach, to explore competitors’ offerings.
Pricing Pressure on Brand Loyalty
June 2025 brought further pricing challenges. Cox Automotive reports that the ATP for all new vehicles climbed to $48,907, up 1.2% year over year. Incentives accounted for 6.9% of the ATP, indicating that discounts remain relatively modest despite rising costs. One of the most popular segments—compact SUVs—has been particularly affected. Higher import tariffs, fewer purchase incentives, and flat pricing have reduced affordability in the segment. This combination could erode brand loyalty, as buyers unable to afford their preferred model may defect to a different brand or body style.
The Industry Outlook for Late 2025
The first six months of 2025 have been marked by shifting loyalties, pricing turbulence, and an increasingly fragmented EV market. For automakers, the challenge will be to keep customers engaged amid uncertainty. This means not only delivering attractive pricing and incentives, but also improving availability, offering flexible financing, and investing in technologies that resonate with loyalists. LexisNexis Risk Solutions notes that the most successful OEMs will be those that leverage data and analytics to simplify their automotive data ecosystems, anticipate market shifts, and design targeted loyalty programs.
Loyalty Methodology
The LexisNexis loyalty methodology uses proprietary linking technology and the LexID® unique identifier to analyze U.S. vehicle ownership and purchase data. This approach captures both new and used vehicle repurchase and retention behavior. For the January 1–June 30, 2025 snapshot, data scientists connected vehicle purchase records with garage data to assess loyalty. The analysis indexed purchased vehicles against garaged vehicles, matching them to the appropriate model category, brand, or OEM. The loyalty rate represents the percentage of garages acquiring a replacement vehicle of the same brand. A score above 50% is considered a strong indicator of customer retention.
Key Takeaways
- Brand loyalty is rebounding: The 53.3% mid-year rate is just one percentage point shy of pre-pandemic levels.
- Toyota dominates: The brand leads in loyalty, especially with its RAV4, while Tesla’s drop highlights growing competition in EVs.
- Tariffs and geopolitics matter: Rising trade tensions are disrupting supply chains and influencing consumer choices.
- EV market is volatile: High prices, shifting incentives, and policy changes are slowing adoption and testing loyalty.
- Affordability is critical: Rising ATPs and limited incentives may push even loyal customers to explore other brands.
*Restatement of 2024 Year-End figures included for comparison.