Tesla Plunges After Consumer Reports Ends Model S Recommendation

20 Oct 2015 | Author: | No comments yet »

Consumer Reports Withdraws Its Tesla Model S Recommendation.

Generally speaking, Consumer Reports has been in love with the Tesla Model S, recently touting that the ultra-quick, all-wheel-drive P85D was such a good car it broke the organization’s rating system. The majority of states to do specifically claim that autonomous vehicles are illegal, and only 14 have considered legislation to regulation self-driving cars. The car could, however, be taken off the road if regulators aren’t thrilled with the idea of autonomous vehicles roaming the country, Bryant Walker Smith, an assistant professor at the University of South Carolina School of Law recently told Wired.

The problems involved “the drivetrain, power equipment, charging equipment, giant iPad-like center console, and body and sunroof squeaks, rattles, and leaks,” Consumer Reports said. CR says that it received responses from about 1,400 Tesla owners in its annual reliability survey, using that data to project a “worse-than-average overall problem rate” for new buyers over the lifespan of the vehicle.

There are laws prohibiting reckless driving, for example, and ‘a state or local law enforcement agency could use these provisions to target’ the cars ‘if they believed the vehicles to be dangerous.’ ‘Connected, automated vehicles that can sense the environment around them and communicate with other vehicles and with infrastructure have the potential to revolutionize road safety and save thousands of lives.’ The firm, which has eight dealerships in the UK said it was waiting for regulatory approval to roll out the software in Britain and Europe but was ‘hopeful’ this should happen within the month. Beyond the immediate hit to the shares, the news raises questions about whether Tesla will need to once again cut its 2015 vehicle delivery guidance of 50,000 to 55,000 cars. Consumer Reports called it “the best-performing car we’ve ever tested“—so good in fact that the vehicle broke its ratings system, scoring 103 out of 100 points. Sounds like CR is hearing about lots of things, ranging from the drive motors to the giant touchscreen in the center stack; 2013 models in particular are getting dinged for their drivetrains.

According to Consumer Reports, in interviews with more than 14,000 Model S owners, an “array of detailed and complicated maladies” was brought to the outlet’s attention. In instances when hardware needs to be fixed, we strive to make it painless.” But Consumer Reports noted the bills could add up quickly for customers once their warranty period expires. They note that all of this should still be covered under Tesla’s warranty — but obviously, a car that doesn’t break is better than a car that breaks under warranty. It’s unclear whether CR’s testing will have any real-world impact on Tesla’s sales, but investors have been quick to react, sending the company’s stock about 10 percent lower today.

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. 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. 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.”

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