Tesla quality problems could signal challenges with Model X and Model Three
The Model S of US electrical cars manufacturer Tesla Motors is seen during a press day of the 66th IAA auto demonstrate in Frankfurt am Main, western Germany, on Sept. 16.
The Model S of US electrified cars manufacturer Tesla Motors is seen during a press day of the 66th IAA auto display in Frankfurt am Main, western Germany, on Sept. 16.
(Odd Andersen / AFP/Getty Photos)
Consumer Reports withdrew its recommendation for the Tesla Model S — a car the magazine previously raved about — because of poor reliability for the $100,000 electrical sport sedan.
The turnabout comes after the influential consumer magazine passed the luxury car a “worse-than-average” rating in its annual report on the predicted reliability of fresh vehicles issued Tuesday.
The news sent Tesla Motors stock plunging as much as 10% before recovering to close off 7% at $213.03 Tuesday.
The rating spooked investors because it pointed to operational problems at the automaker, said Emmanuel Rosner, autos analyst at CLSA Americas, an international investment rock-hard.
“We have already seen consistent product delays, and now there are quality issues,” Rosner said.
Investors are not so worried about the Model S, or the Model X, its electrified crossover sibling that is just now going into production — leisurely — after two years of delays. Their thicker concern is that Tesla won’t be able to produce on the Model Three, a smaller, less-expensive electrified car with a targeted release in 2017.
“Investors are betting on the Model three being a mass-market car, but having low-quality marks is a real knock if you are going to put out a volume car,” Rosner said. “Tesla has to get its quality issue in order.”
Tesla spokesman Ricardo Reyes said the Palo Alto automaker keeps in close communication with its customers to “proactively address issues and quickly fix problems.”
He noted that over-the-air software updates permit Tesla to diagnose and fix most bugs without the need to come in for service.
“In instances when hardware needs to be immobilized, we strive to make it painless,” Reyes said.
“Consumer Reports also found that customers rate Tesla service as the best in the world.”
Consumer Reports surveyed 1,400 Model S owners “who chronicled an array of detailed and complicated maladies” with the drivetrain, power equipment, charging equipment and giant iPad-like center console. They also complained about bod and sunroof peeps, rattles and leaks.
“As the older vehicles are getting up on miles, we are watching some where the electrified motor needs to be substituted and the onboard charging system won’t charge the battery,” said Jake Fisher, CR’s director of automotive testing. “On the newer vehicles, we are observing problems such as the sunroof not operating decently. Door treats proceed to be an issue.”
Fisher also observed that the flaws could signal future problems for the brand. The risk is significant because the vehicles are becoming more elaborate, he said.
For example, a signature feature of the Model X are “Falcon Wing” doors that sway out and fold up. Fisher asked how reliable those will be if Tesla already is having trouble with door treats on the Model S.
Tesla plans to toughly dual production next year. Through the very first nine months of the year, the automaker has delivered only 33,117 vehicles. Current Tesla models commence at about $70,000 and have an average transaction price of about $100,000.
While wealthy Tesla owners are likely to have other cars, making problems less of a hassle, if Tesla reaches its two thousand twenty aim of selling several hundred thousand Model 3s annually, buyers might not be as forgiving, Fisher said.
Strong customer service and satisfaction could help Tesla weather the Consumer Reports downgrade, said Thilo Koslowski, automotive practice leader at Gartner Inc.
“With any youthfull company, you have some teething problems. But Tesla customers have such strong belief and loyalty they will excuse some of these problems,” Koslowski said. “Tesla will fix the issues and learn from them. I don’t think it will hurt the company long term.”
Consumer Reports slammed Tesla’s Model S on reliability even however it loves the way the car drives.
Just last month, the magazine awarded one version of the car — the all-wheel-drive Tesla Model S P85D — one hundred three points, a tally so high it broke the Consumer Reports road-test ratings system. Its driving spectacle was better than any other vehicle the magazine has evaluated.
But Fisher said road-test scores are based on the spectacle, convenience and road manners of the cars Consumer Reports buys and evaluates.
They are separate from CR’s new-car predicted-reliability scores. A high-performing vehicle still might be a service nightmare, while an uninspiring, appliance-like model could be trouble-free.
The Model S ratings are not representative of new-technology electrified cars, Consumer Reports noted. Nissan’s electrical Leaf earned average reliability marks this year and generally has rated above average in previous years.
While Consumer Reports graded the Model S, it didn’t officially include Tesla in its annual ranking of twenty eight auto brands because, until last month, the car company had only one vehicle in the market.
But if it were scored as a brand, the automaker would have placed 19th, inbetween Acura and GMC, Consumer Reports said.
Lexus was the top brand for reliability. The rankings of the other brands with better-than-average reliability are second-place Toyota followed by Audi, Mazda, Subaru, Kia and Buick.
The worst brands are Ram followed by Jeep and Fiat, which ranked dead last.
The two thousand fifteen Annual Auto Reliability Survey relied on data from more than 740,000 vehicles.
“We’ve seen a number of brands fight with fresh transmission technology,” Fisher said, including systems such as a dual-clutch gearbox, a continuously variable transmission and transmissions with eight or nine speeds.
But some manufacturers are getting it right. Audi and BMW have reliable dual-clutch transmissions, while the CVTs in Honda and Toyota hybrids have been strong performers.
Lexus collected top reliability marks for all seven vehicle lines scored in the Consumer Reports survey. Buick was the only domestic brand in the top Ten, coming in seventh place. Fiat-Chrysler products took five of the seven bottom catches sight of.
“We’re significantly accelerating our rhythm of improvement for our entire product lineup,” said Matt Liddane, vice president of quality, FCA North America. “We need to proceed to shove stiffer.”