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Tesla Stock Slides After Consumer Reports Gives ‘Below Average’ Model S Rating

Tesla Motors stock price dropped 10% Tuesday after Consumer Reports published its findings on the reliability of the manufacturer’s Model S electric sedan, giving the car a below average “overall problem rate.”

Consumer Reports has previously given high marks to the Model S for driving dynamics. It recently gave the all-wheel-drive Model S the highest road test score ever issued to any car Consumer Reports has tested. However, as Consumer Reports says today, “its predicted reliability is another matter.”

After receiving survey responses from 1,400 Model S owners, Consumer Reports rated the reliability of the cars below average. The below average rating means, despite the car’s outstanding driving performance, Consumer Reports will not recommend it.

There were a list of complaints from owners ranging from fairly minor–rattles, mis-aligned trunk latches, sunroofs that won’t open and wipers that won’t operate–to much more serious problems like failed drive motors and charging equipment.

Last year, Consumer Reports gave the Model S an average reliability rating, but this year the rating dropped in part because owners of the slightly older (2013) Model S complained of an increase in problems with the drive system which seem to be associated with age and wear.

Jake Fisher, Consumer Reports director of automotive testing, told the LA Times, “As the older vehicles are getting up on miles, we are seeing some where the electric motor needs to be replaced and the onboard charging system won’t charge the battery.”

The uptick in problems may bode ill for long-term owners or possibly for the secondary market, but so far the company is covering all of the cost of fixing all the problems under its 8-year/unlimited mileage warranty on the battery and drivetrain.

And Tesla is helping itself by, according to its cars’ owners, providing terrific customer service. Consumer Reports found 97% of owners said they would buy the car again. Their report states, “Almost every survey respondent made note of Tesla’s rapid response and repair time, despite the lack of a traditional dealer service network.”

As Consumer Reports suggests, reliability issues are probably not the end of the world for the relative handful of Americans who can afford a $100,000 high-performance sports sedan. The real question is what happens in the long term once the Model S is out of warranty. And perhaps more importantly, will the same kinds of reliability issues hamper sales of the affordable Model 3 which Tesla plans to roll out in much higher numbers in 2017.

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