Tesla shares fell this week following the announcement that Consumer Reports will no longer recommend the company’s Model 3 vehicle due to its many reliability issues.
CNBC reports that Tesla shares took a hit this week following a report by Consumer Reports relating to the reliability of Tesla’s Model 3 vehicles, particularly in cold weather conditions. Due to Tesla’s multiple issues, Consumer Reports will no longer recommend the Model 3; an announcement that has negatively impacted the company’s stock value at a critical time for the firm.
Jake Fisher, senior director of Automotive Testing at Consumer Reports, commented on the Model 3’s issues stating: “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.” The electronics in an electric car being faulty is obviously not ideal, this resulted in the company’s stock price trading down by nearly two percent following the release of the report.
Consumer Reports bases its recommendation of particular cars based on several key factors such as crash test performance, testing, and reviews by the Consumer Reports auto team and feedback from vehicle owners. Following reports of Tesla vehicles performing extremely poorly in the recent polar vortex — with driving range cut almost in half and some car handles becoming frozen shut — Consumer Reports chose to no longer recommend the car.
In fact, the Model 3 tested by Consumer Reports had its own fit and finishing problems with a stress fracture appearing in the rear window of the vehicle. This adds further credence to analysts concerns that Tesla’s increased production last year resulted in a drop in the quality of vehicles.
When asked about the recent findings of Consumer Reports, a Tesla spokesperson stated:
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 fell 11 spots to number 13 out of the 33 brands ranked by Consumer Reports and is currently tied with Chrysler for the biggest drop in brand ranking’s this year. Subaru has soared tot he top of the latest rankings, with Fisher stating: “Subaru does almost everything really well. They make an enjoyable car to drive and great reliability too.” Fiat was rated the lowest of all the brands just below Jaguar and Land Rover.