I've been a Stratechery subscriber since it started and one thing I have noticed about Ben is that he occasionally gets a little overexcited about stuff that is probably not totally close to his wheelhouse. This is one of those times.
In his opening about Tesla's brand halo, he notes:
I know plenty of very rich people who drive a Tesla not for the finishes but rather the Full Self-Driving (Supervised); there is nothing like it on the market, at least when it comes to cars you can own.
(Emboldening is mine).
The problem is, Ben is simply wrong to say "there's nothing like it on the market" and it's a perfect illustration of the impact of both Tesla's brand halo, and why brand matters a lot in cars.
Where Ben is sort-of correct about FSD (Supervised) is that it does have a genuine and distinctive strength: breadth of coverage. Tesla doesn't limit FSD to a pre-mapped road network. If the cameras see usable lane lines and the system is confident enough, it will typically engage. FSD extends operation to surface streets, neighbourhood roads, and complex intersections, with over-the-air updates that can change behaviour overnight. No other mass-market consumer system matches that scope.
However... Tesla FSD (Supervised) remains a Level 2 technology. Systems such as Tesla FSD, Ford BlueCruise, GM Super Cruise, and BMW Highway Assistant all fall into this same category. The car can steer, accelerate, and brake in certain conditions, but the driver remains responsible and must supervise at all times.
And there is real competition within the Level 2 space. GM Super Cruise is available across more than 20 Chevrolet, Cadillac, GMC, and Buick models and is highly regarded for highway use. Super Cruise covers roughly 750,000 miles of LiDAR-mapped roads in the US and Canada. Its tradeoff is consistency within mapped territory versus Tesla's broader but less predictable coverage. But if you're in a covered area, the experience is likely to be much better than Tesla's.
Mercedes Drive Pilot was the first Level 3 system certified for consumer use in the US, which is technically more autonomous than FSD — at Level 3, the system, not the driver, is legally responsible for driving, and you can (legally) take your eyes off the road. However, the Drive Pilot Level 3 system would only work at low speeds on a few stretches of highway, making it look limited compared to Tesla FSD's ability to drive in almost all conditions including city traffic. For what it's worth, Mercedes has since abandoned Drive Pilot and is moving to a Level 2 approach, partly due to low adoption. Mercedes found that not many people were willing to pay that much for a feature that could only be engaged under strict conditions.
This, by the way, is a problem that Tesla will also face when moving from Level 2 to Level 3. They will have to charge a heck of a lot more for Level 3, and it's not clear that most/anyone will pay for it.
The claim is particularly shaky if you look outside the US. Car markets like BYD and companies like Wayve are increasingly offering high-quality self-driving capabilities for consumer vehicles in a similar vein to Tesla FSD. Chinese manufacturers are moving fast in this space. I have Chinese friends whose car drives them to work every day, supposedly with their supervision, but actually while they read emails. It's that reliable, at least in big cities.
But all of this sort-of underlines the point that Ben is ultimately making: Tesla's brand halo is such that people believe it's a leader in self-driving, even when it's actually not. As with most decisions connected to cars (something I learned working on car review brands) people only make semi-rational decisions even when they think they are being entirely rational. You like certain brands, and you look for rational reasons for that choice even when that ignores involving areas where competition is at the same level or better. Brand loyalty mean an incredible amount in the car business.
The brand is a blessing and a curse
All of which is why I think Tesla is actually in big trouble.
Like a lot of new companies, the brand perception has moved through phases. First, maybe from 2008-2012, it was the scrappy innovator, a Silicon Valley startup that wanted to prove EVs weren't slow or dull. Elon Musk was seen as a combination of Eddison and Steve Jobs, a genius who was going to have statues raised to him in the future. Then it was a luxury disruptor, thanks to the Model S. The Model Y then brought the brand within reach of a new audience, and it became a mass market brand. That takes us up to about 2022
Since then, though, cracks have appeared. First, as legacy brands launched credible EVs, Tesla's technological lead began to narrow, and its relatively spartan interiors started to feel like a liability rather than a design statement. It had quality issues which were addressed slowly.
Consumer perception metrics were particularly troubling. The company's recommendation score in the US reached a new low of 4.0 out of 10, down from 8.2 in 2023. Scores for reputation, trust, and "coolness" declined particularly sharply in Europe and Canada.
And of course there is the most corrosive thing of all: The Musk Effect. Musk's political activities — from running DOGE in the Trump White House to endorsing far-right figures like Germany's AfD and Tommy Robinson in the UK — sparked consumer backlash that persisted throughout 2025, and continues now. As Forrester analyst Dipanjan Chatterjee put it, Musk's reputation "rubbed the sheen right out of what was once a darling and soaring automotive brand."
Despite increased EV registrations across the continent, Tesla registrations in Europe dropped by 49% through January and February 2025. In Sweden, Germany, and the UK, registrations fell by over 80%, 46%, and 68% respectively. Europe, where environmental and political values are especially salient to purchase decisions, has been the hardest hit.
It's not entirely one-way. While new-buyer metrics collapsed, Tesla's US loyalty score among existing owners actually increased slightly, from 90% to 92%. People who already own a Tesla still mostly intend to stick with the brand. The problem is with acquisition — convincing new buyers to choose Tesla over a rapidly widening field of alternatives. Five car makers now outrank Tesla in brand value: Toyota, Mercedes-Benz, Volkswagen, Porsche, and BMW, while BYD's brand value jumped 23% in the same period Tesla's fell 36%.
In short: Tesla went from underdog Silicon Valley insurgent, to aspirational luxury disruptor, to mainstream EV dominant, and has now arrived somewhere considerably more uncomfortable — a brand whose product is still respected by owners but which has become politically charged, competitively pressured, and no longer "cool" in the way it once was, particularly in Europe. And when purchases of cars are so heavily influenced by brand perception, that would be a big, big issue.