Tesla Model 3 can no longer be recommended, says Consumer Reports

Los Angeles

Tesla’s stock price sank Thursday after Consumer Reports blasted the reliability of the company’s new Model 3 sedan and dropped it from a list of recommended vehicles.

“Consumers expect their cars to last — and not be in the repair shop. That’s why reliability is so important,” said Jake Fisher, senior director of automotive testing at Consumer Reports.

Problems reported by Model 3 owners included loose body trim and glass defects, the organisation said. The glass in the back window in Consumer Reports’ own Model 3 test car cracked in the parking lot during a cold snap.

Tesla’s stock price dropped sharply after the news was released around 9:30am. PST and closed down 3.7% at $291.23.

Consumer Reports dropped the Tesla Model S luxury sedan from its recommended list last year. The Model X luxury SUV was never recommended.

In October, Consumer Reports said Tesla-branded cars in general had dropped to third-worst in reliability, with only Cadillac and Volvo lower.

Despite the reliability problems, the Model 3 ranks high in Consumer Reports’ customer satisfaction survey, which gauges buyer satisfaction over time. The most recent survey came out last month. In fact, social media complaints from Model 3 owners — which include battery malfunctions, computer-system failures, door handles that won’t open, and body parts filling with snow and falling off — are often accompanied by comments such as “still love the car.”

The company is suffering from slow response rates from customer service representatives, inability to get cars serviced, and waits for parts that can last for months.

Chief Executive Elon Musk acknowledged those problems in a call with analysts last month. He said the company was reconfiguring its logistics system and introducing a phone app to schedule appointments.

Tesla did not return requests for comment.

Musk himself had nice things to say about Consumer Reports in May 2018, when he tweeted: “Tesla will always refute articles that are misleading and point out if there is someone with a pattern of doing so. Many fit this description but Consumer Reports is always fair & accurate in their criticism.”

The organisation said Thursday that negative reports on reliability surveys sent the Model 3 and the Chrysler 300 “tumbling 11 spots” toward the bottom of its car brand rankings.

In a prepared statement, Tesla said: “Not only are our cars the safest and best performing vehicles available today, but we take feedback from our customers very seriously and quickly implement improvements any time we hear about issues. That’s just one of the reasons why, in this very same survey from Consumer Reports, Model 3 was rated as the #1 most satisfying car, and why Tesla vehicles have topped Consumer Reports’ Owner Satisfaction survey every year since 2013 — the first year Tesla was included in it.

“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. 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.”

Tesla’s future depends on the success of the Model 3, originally positioned as a mass-market electric sedan. After a slow start riddled with production problems, the company sold 145,000 Model 3s in 2018. Sales in Europe have just begun, and sales in China are scheduled to begin next month. Social media forums in Europe are already busy with complaints about delivery and quality issues.