Tesla, Inc. (NASDAQ: TSLA) shares fell over 3% after a new report with reviews from thousands of vehicle owners raises questions about the reliability of Tesla’s Model 3. Consumer Reports will no longer recommend the Model 3 due to the reliability issues and has fell 11 spots to number 13 out of the 33 brands ranked by Consumer Reports. Telsa tied with Chrysler in the biggest drop in rankings this year.
Jake Fisher, senior director of Automotive Testing at Consumer Reports said “When we look at the Model 3 lot of the issues are the electronics. There are some issues replacing the (navigation/infotainment) screens, for instance, but we’ve seen other issues in terms of the trim breaking and the glass.”
There are several factors Consumer Reports take into consideration prior to recommending particular models. The feedback of vehicle owners, crash test performance, and the testing and reviews conducted by Consumer Reports own auto team. The conclusion was reached mostly due to the reviews and reports from the Tesla owners who had issues with the finish of their vehicles. Consumer Reports had their own Model 3 which was tested and had a small stress fracture on a rear window.
CNBC reported in March 2018, “Tesla’s future as a mass-market carmaker hinges on efficient, automated production of the Model 3, which more than 400,000 people have already reserved, paying $1,000 refundable fees to do so. Musk said in July 2017 that Tesla would probably be making 20,000 Model 3s per month by December.”
This year’s report confirms the concern many analysts had last year regarding the quality of the Tesla models when the company ramped up production. At one point, Tesla was manufacturing a high ratio of flawed parts and vehicles which led to more rework and repairs.
A Tesla spokesperson said, “We’re setting an extremely high bar for Model 3. We have already made significant improvements to correct any issues that Model 3 customers may have experienced that are referenced in this report, and our return policy allows any customer who is unhappy with their car to return it for a full refund.”
The spokesperson added, “This new data from Consumer Reports comes from their annual Owner Satisfaction survey, which runs from July through September, so the vast majority of these issues have already been corrected through design and manufacturing improvements, and we are already seeing a significant improvement in our field data.”
Even with the reported issues, Tesla owners are still generally satisfied with their vehicles.