Tesla Model 3 loses Consumer Reports recommendation over ‘reliability problems’

Consumer Reports has placed the Tesla Model 3 into that fun-to-drive, terribly unreliable category where brands like Alfa Romeo, Land Rover and Maserati also live.

Consumer Reports, which has a complicated relationship with Tesla, says it can no longer recommend the Model 3 because issues with the paint, trim and body hardware raises reliability questions. CR members reported the results in an annual reliability survey that includes data on about 470,000 vehicles.

The report caused Tesla shares to fall more than 2.7%.

The Model 3 is arguably Tesla’s most important vehicle. Tesla’s survival hinges on Model 3. It’s no longer just about being able to produce and deliver the vehicle cost effectively — although those are biggies. If more consumers turn to other electric vehicles, the sales momentum that helped Tesla have two consecutive quarters of profits could falter.

Owners appear to like, even love, the Model 3. It received top marks in CR’s recent owner satisfaction survey and also earned a positive road-test score. It’s a weird duality — and one the even CR acknowledges — that other aspirational, lifestyle and luxury vehicles share. Owners love the vehicles, despite persistent issues with the components inside them.

“While Teslas perform well in Consumer Reports’ road tests and have excellent owner satisfaction, their reliability has not been consistent, according to our members, which has resulted in changes to their recommended status,” Jake Fisher, senior director of auto testing at Consumer Reports, said in statement.

Tesla has asked Consumer Reports for more details about the issues customers reported. According to Tesla, CR said they had no more specific information to share. (See update below)

“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,” a Tesla spokeswoman said in an emailed statement. “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.”

CR provided TechCrunch the email exchange with Tesla, which shows that the consumer advocacy organization answered many of the automaker’s questions. Tesla asked for details on when the survey was conducted, some of the methodology, the number of Tesla Model 3 owners who responded to the survey and for more detail on customer complaints about the trim, windows, and door handles.

The total sample size was nearly 500 Model 3s, according to CR. “Among 2018 model vehicles, the number we have for the Model 3 is far more than many vehicles we receive data for,” CR wrote in the email. “All of the data used for our prediction was from 2018 models. We had insufficient data on 2017 vehicles to make a judgment.”

CR told TechCrunch that typical sample sizes are between 200 to 300 vehicles.

CR didn’t provide Tesla with detailed information about the complaints on the door latches. On the windows, CR wrote: “Members reported problems about the windows, including glass defects. One customer commented about the “rear window developed stress cracks after delivery.”

The question of reliability has persisted for all of Tesla’s vehicles. CR doesn’t recommend the Model X or Model S either due to reliability issues. The Tesla Model X was included in CR’s top 10 least reliable vehicles list for 2019.

The CR survey revealed problems with the suspension, particularly in the 2017 Model S and hardware issues in the Model X. Owners in the survey cited numerous reliability problems with the Model 3.

Tesla noted that it has made “significant improvements” to correct any issues that Model 3 customers may have experienced that are referenced in this report. The automaker also cited that its 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,” the spokesperson said.

Tesla has the capability, which it uses often, to roll out software updates to fix bugs, improve performance, and treat customers to fun surprises. Paint and trim issues are a different matter, of course.

And despite this ability to fix and improve the vehicle over time, the CR reliability survey might be enough to turn potential customers away from Tesla and towards another electric vehicle brand.

It’s possible that Tesla’s fan base is strong enough to keep the sales momentum. Plenty of other brands and models, have a fervent following despite problems with the vehicle.

“In most cases, reliability issues will undermine satisfaction,” Fisher said. “But when a vehicle has an enthusiastic following, like with Tesla, owners may overlook some issues. We’ve seen this with other vehicles such as the Jeep Wrangler and Chevrolet Corvette.”