Consumer Reports Withdraws Its Tesla Model S Recommendation

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In late August, a report out of Consumer Reports said that the Tesla Model S P85D, an all-wheel-drive electric sedan that also happens to be the most expensive model of the car, performed “better in our tests than any other car ever has, earning a perfect road-test score.”

We said at the time that the review was something you don’t see every day. But more shockingly, Consumer Reports has just assigned Tesla’s Model S a “worse-than-average” rating in a new, annual report about the predicted reliability of new vehicles.

Numerous outlets, including the L.A. Times, began reporting the bad news earlier. Shares of 12-year-old Tesla, which has a $26.5 billion market cap, have been in a nosedive since, falling 10.3 percent so far today.

According to Consumer Reports, in interviews with more than 1,400 Model S owners, an “array of detailed and complicated maladies” was brought to the outlet’s attention. The “main problems,” says the report’s authors, involve the drivetrain; power equipment; charging equipment; its giant iPad-like center console; and body and sunroof squeaks, rattles and leaks.

Specific areas that scored worse on the 2015 model, compared with last year’s model, says Consumer Reports, are its climate control, steering, and suspension systems.

Combined, the issues were enough to knock the car down from last year’s “average” reliability prediction. It also means the Model S can’t receive Consumer Reports’ widely coveted “recommended” designation. (To be recommended, says the organization, a vehicle has to “meet stringent testing, reliability, and safety standards, including having average or better predicted reliability.”)

Asked for comment, a Tesla spokesperson emailed us the following statement: “Consumer Reports also found that customers rate Tesla service and loyalty as the best in the world. Close communication with our customers enables Tesla to receive input, proactively address issues, and quickly fix problems. Over-the-air software updates allow Tesla to diagnose and fix most bugs without the need to come in for service. In instances when hardware needs to be fixed, we strive to make it painless.”

Indeed, Consumer Reports acknowledges that Tesla is working hard to address problems as they develop. As it states in its new report: “Despite the problems, our data show that Tesla owner satisfaction is still very high: Ninety-seven percent of owners said they would definitely buy their car again. It appears that Tesla has been responsive to replacing faulty motors, differentials, brakes, and infotainment systems, all with a minimum of fuss to owners . . . For its early adopters, Tesla has made a practice of overdelivering on service problems under the factory warranty.”

As for whether this new report could have a lingering impact for Tesla, Max Zanan, a longtime New York-based automotive retail expert, says he doubts it highly.

Zanan points to the car brand rated the most predictable by Consumer Reports: Buick. “If you go to any Buick dealership on earth, you can buy a car on the spot because people aren’t interested in boring cars like Buick,” he says.

Zanan also notes the rise Korean automaker of Kia and Hyundai, which respectively finished sixth and ninth in Consumer Reports’ reliability ratings. (Kia even beat Honda, and by a significant margin, says the outlet.)

“In the ’90s, Kia and Hyundai had poor reliability ratings, too” he says. “With time, they improved their processes and are now able to build very reliable cars with which consumers are very happy.”

Even more immediately, Tesla needn’t worry about blowback from the report, in Zanan’s view.

“Purchasing decisions aren’t guided by Consumer Reports,” he says. “They’re guided by feel of the car, marketing, and word of mouth.”