Second place really doesn't look good on Tesla

Some products become so synonymous with their category that the brand name replaces the thing itself. You don't use an internet search engine, you Google it. You don't blow your nose on a tissue, you grab a Kleenex. And for years, Elon Musk's car company had a similar advantage. "Tesla" and "electric vehicle" were commonly used interchangeably, almost as if no other EV brand existed.

That was Tesla's superpower. They didn't just make EVs; they were EVs. Every other manufacturer was playing catch-up. But now? They're in second place. And for a brand like Tesla, second place might as well mean "first loser". Not even the Cybertruck design debacle was as bad for the brand as this.

Reality catches up

So what's happened? In short, Chinese manufacturer BYD has overtaken Tesla as the world's biggest electric vehicle maker. Tesla delivered 1.64 million vehicles in 2025; down 9% from the previous year. BYD sold 2.26 million. That's not close; that's getting beaten at your own game. And it's not just about sales; Tesla's brand value has plummeted 35% in Interbrand's latest ranking.

But here's what's genuinely bonkers: Tesla's stock finished 2025 up 11%. Meanwhile traditional manufacturers like Toyota, who actually make consistent profits from their EVs, continue to be valued at a fraction of Tesla's worth.

How's that possible? Basically, Elon Musk is the world's most effective one-man marketing department. He doesn't just promote Tesla; he is Tesla. Every tweet, every wild promise about robotaxis and humanoid robots convinces investors they're not buying a car company; they're buying a sci-fi future.

The problem is, this cuts both ways. Now Musk's own brand is inseparable from Tesla's, his erratic behaviour and divisive politics become Tesla's problem too.

As Michael Jordan famously pointed out, "Republicans buy sneakers too"... and the same principle is playing out here in reverse. Turns out, not entirely surprisingly, that the people most motivated to buy an eco-friendly car don't always share the same politics as Elon.

The maturing market

It's worth noting that the market as a whole has matured. At the outset, Tesla made electric cars desirable, fast, luxurious, aspirational. They removed the "worthy" stigma and replaced it with swagger. That was revolutionary… but that was also 10 years ago.

Nowadays, Mercedes, BMW, Audi and Porsche are making credible electric cars with decades of brand heritage behind them. Chinese manufacturers are offering quality EVs at prices that make Tesla look overpriced. The branding of EVs has shifted from "I'm saving the planet while being impossibly cool" to "This is just a good car that happens to be electric."

All of which means that for Tesla, second place really does equal first loser. The brand's whole identity is wrapped up in being the disruptor, the one everyone else is chasing. Coming second – especially to a Chinese manufacturer most people couldn't pick out of a lineup – takes all the air out of this brand narrative.

Elon knows this, which is why he's pivoting to robotaxis and robots right now. "We're not really a car company" is the subtext. It's classic brand repositioning when your core business is wobbling. The question is, will anyone buy it?

After all, Tesla has spent a lot of time resting on its laurels. As a result, quality control has slipped, customer service has deteriorated and the CEO has become a liability. The brand promised – and is still promising – the future. But in practice, they're delivering inconsistent build quality and broken promises, while continuing to talk about full self-driving being "just around the corner"... at it has been for over a decade now.

Key takeaway

Right now, Tesla faces a choice. Focus on being a premium EV brand; the Apple of electric cars. Or embrace the pivot to full tech company, betting everything on autonomous driving to AI.

What they can't do is pretend nothing has changed. Because the results are in, and the brand that defined an entire category has been outmanoeuvred. For creatives in general, it's a textbook case in how even the most powerful brand narratives eventually collide with reality.

The question now isn't whether Tesla can recover. It's whether they can accept that in the brand game they've built for themselves, second place really does equal first loser – and that might mean completely reimagining what winning looks like. Good luck with that, Elon.