Tesla's appeal to car buyers is 'clearly formidable' but not rock solid, J.D. Power study finds

• As Tesla faces more competition, car buyers are considering alternatives, a J.D. Power study finds.
• Traditional automakers and new startups are flooding the electric-car market in the US.
• The J.D. Power report found many customers may still be on the fence about buying an EV.

Tesla's dominant role in the electric-vehicle market could eventually be overtaken by another company, according to a report from J.D. Power.

The study by the consumer-intelligence company on electric-car buying trends found that only a small percentage of electric-car shoppers plan to stay entirely loyal to Tesla.

"One could argue this indicates that, while Tesla's appeal is clearly formidable, it's not absolute and could be displaced by a worthy alternative," said Stewart Stropp, senior director of automotive retail, in J.D. Power's press release.

While Tesla was ranked among the top luxury car brands, only 4% of buyers who expressed interest in Tesla said that they would only consider purchasing a Tesla.

Survey respondents for the inaugural study that took place from December to January included 9,030 prospective buyers in the US planning to purchase or lease a car within the next year.

Consumers' willingness to consider brands outside of Tesla demonstrates a fundamental shift in a US market that Tesla has fundamentally led. In 2020, Sandy Munro, a top car expert, said Tesla is a full decade ahead of its competitors.

At the same time, other automakers are flooding the EV space and Tesla is no longer the only EV option.

Electric-vehicle startups, including Lucid Motors, Rivian, and Fisker have attracted billions of dollars in investments, while traditional companies like General Motors and Ford have already begun to launch electric vehicles.

When looking outside of Tesla, customers said they might consider alternative brands for better performance, functionality, and purchase price. At about $35,000, Tesla's Model 3 is its cheapest car, but features a price tag that some car buyers might balk at. Elon Musk has said Tesla is aiming to have a $25,000 Tesla ready in "about three years." Chevrolet is readying a $33,995 EV, the 2022 Bolt, for a planned summer launch.

The J.D. Power study also found many customers are on the fence about buying any electric car at all. About 59% of surveyed new vehicle shoppers identified themselves as only somewhat likely or unlikely to buy an electric car.

"To avoid a potential ongoing inventory surplus, it behooves manufacturers and retailers to identify why shoppers in the middle ground aren't completely sold on the technology, and how to get them over the hump into the 'very likely' consideration camp," Stropp said in the release.