Tesla shares fall after Consumer Reports says it will no longer recommend Model 3

Tesla shares fall nearly 2 percent after a new report, based in part on the reviews of thousands of vehicle owners, raises questions about the reliability of Tesla's Model 3.

Consumer Reports says it will no longer recommend the Model 3 due to the reliability issues.

A Tesla spokesperson said, "The vast majority of these issues have already been corrected through design and manufacturing improvements."

Tesla shares fell after a new report, based in part on the reviews of thousands of vehicle owners, raises questions about the reliability of Tesla's Model 3. Consumer Reports says it will no longer recommend the Model 3 due to the reliability issues.

"When we look at the Model 3 lot of the issues are the electronics," said Jake Fisher, senior director of Automotive Testing at Consumer Reports. "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."

Tesla shares were trading down nearly 2 percent after the report was released Thursday.

Consumer Reports recommendation of particular models is based on several factors, including the feedback of vehicle owners, crash test performance and the testing and reviews conducted by the Consumer Reports auto team. While it reached its conclusion after reading reports of Tesla owners complaining about the fit and finish of their vehicles, Fisher points out the Model 3 owned and tested by Consumer Reports had a rear window with a small stress fracture.

This report confirms the concern many analysts have raised about the quality of Tesla models slipping as the automaker ramped up production last year. As Tesla CEO Elon Musk pushed his team to meet ambitious Model 3 production targets, he repeatedly said Tesla was in the midst of "production hell."

At one point, Tesla added an additional Model 3 assembly line by erecting a permanent tent outside its assembly plant in Fremont, California. Reports of production issues ranged from robots on the assembly line not working properly to Tesla employees claiming the company was churning out a high volume of flawed parts that led to the automaker needing to rework and repair new models before being shipped to customers. 2019 Chrysler 300 Source: Fiat Chrysler 2019 Chrysler 300

When asked about Consumer Reports' new opinion of the Model 3, a Tesla spokesperson said, "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."

The spokesperson added, "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."

While many Tesla owners may not be happy about the reliability of their car, Consumer Reports says those owners are generally satisfied with their electric vehicles.

"They like their cars, but they still tell us the truth. They tell us the problems they are having with them," said Fisher.

As a brand, Tesla fell 11 spots to number 13 out of 33 brands ranked by Consumer Reports. Tesla is tied with Chrysler for having the biggest drop in brand rankings in this year's auto issue.

By comparison, Subaru has soared to the top of the latest car brand rankings. The Japanese brand climbed six places to become number one in the eyes of Consumer Reports, just ahead of Genesis, Porsche, Audi and Lexus.

"Subaru does almost everything really well," said Fisher. "They make an enjoyable car to drive and great reliability too."

The lowest rated auto brands by Consumer Reports is Fiat, right behind Jaguar and Land Rover.

GM was a finance company dominated by unions. It had little in common with the Tesla of today.

The GM “bailout” was an illegal seizure and transfer of assets from investors and creditors to political union cronies. Your characterization has no resemblance to reality.

I said that Elon Musk is a visionary and his accomplishments Have been “incredible”. I thought that would satisfy you. But you have pushed me further, so I do need to go into a little greater detail. Elon Musk is the most successful person in history at hoodwinking politicians that want to portray themselves as greenies. He and his companies have managed to get $5 Billion in direct government subsidies. Along with buyers subsidies on Tesla automobiles which have come to over $3 Billion dollars... And then there are the additional billions in federal and state tax breaks that Tesla customers have also received. Altogether that comes to something close to $10 Billion dollars in government subsidies and tax credits. According to a 2014 report the government lost $11.2 Billion on the GM bailout.

But wait there is more... free charging stations, some Tesla buyers have managed to scam the system for even more. I personally know of one electrical engineer who lives South of Portland who charges his Tesla everyday at a free charging station. Then he goes home and uses his Tesla battery to charge up the storage batteries that are he got with his heavily subsidized roof top solar cells. The guy pays nothing for the electricity to drive his Tesla and power his house.

In 2016 when Denmark pulled the subsidies there, sales dropped 94% immediately. The sad fact is that when the subsidies and tax credits go away Tesla goes away. So sorry Tesla Motors is a house of cards. The 10% loss in stock value in the last two weeks is inconsequential compared to the likely long term possibilities. I doubt that President Trump and congress are going to try to "bail" them out, which if you are an investor would be the good news.

He and his companies have managed to get $5 Billion in direct government subsidies.

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Your source is obviously the LATimes hit piece which is no longer correct.

Tesla is not a house of cards, and you’ve failed to bolster your claim that it is. Tesla has gone from nothing to $21 billion in revenue and 48,000 employees in 15 years. They are better off financially this year than they were last year.

My Mother-in-law had a Renault back when they were sold in the US, mid 80’s IIRC. It was on of the larger ones, not the sub-compacts.

It was really cold, for Northeast Florida, one winter morning, 20°F or so, and she went out to warm up the car to go to work.

Started it and turned on the heater and defroster then went back in the house to have coffee.

When she came out to go to work, the entire REAR WINDOW had shattered into millions of tiny pieces!.......................

Your source is obviously the LATimes hit piece which is no longer correct.

I was not aware of the “LATimes hit piece”. But there seem to be plenty of other “hit pieces” to pick from if that is what you want to call them.

My concern is with a company whose sales have been very dependent on government subsidies and tax credits which are going away. The same government slapped the CEO with a $20 million fine and forced him to step down as chairman over alleged fraud. Whenever the government picks winners and losers there are negative consequences. Many of those in government who picked Tesla to be a winner are now gone and many who took their place think that Elon Musk is a loser

My concern is with the employees of complete quality control departments being let go and defective products being sold to consumers who have not been able to get them fixed.

My concern is with a company whose niche market is now being invaded by larger, more established firms with better infrastructure. My concern is with a company whose market capitalization was based on robust expectations for the future and is many times higher than its competitors.

My concern is with the future of a technology, electric cars which has captured the imagination of the “green” movement. But if you look closely at the efficiencies of generating power, transmitting power, charging and discharging batteries, and a myriad of other “small details” the whole scheme still false flat on its face without massive government subsidies.

I could go on and on. This is not an indictment of Elon Musk. He is clearly a visionary and someone who has been able to pull the strings of those who have the ability to hand out government incentives and cash. But if you can't see that Tesla Motors and its CEO and co-founder have lust their luster... then you are being willfully blind. Tesla is clearly a house of cards that could collapse at any time.

Many of those in government who picked Tesla to be a winner are now gone and many who took their place think that Elon Musk is a loser

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Really? The same deal was and is available to Tesla’s competitors.

If you don’t know that, I see no reason to take your opinion seriously.

If you don’t know that, I see no reason to take your opinion seriously.

The electric car tax credit is going away... if you don't know or understand that and the impact that it will have on Tesla Motors then no one should take your opinion seriously. Do you have some insider info about the electric car tax credit that the rest of us should know about?

So a little IQ test for you: The $7,500 credit applied to vehicles delivered by the end of 2018. Those delivered in the first half of 2019 will get $3,750, those delivered in the second half of 2019 will get just $1,875. Do you think that this phase out will have a positive or negative effect on Tesla sales? (a hint, when Denmark dropped subsidies a few years ago Tesla sales dropped by 93%) Tesla's market cap which is still several times larger than competitors was based on investor expectations of future sales expanding in an almost exponential rate. If sales start falling... what do you think that will do to investor expectations and Tesla's market cap? And finally can you give us a definition of the meaning of a house of cards?

You must not know that Tesla is lowering costs to compensate for the loss of tax credits in America.

I guess you also don’t know about Tesla’s increased sales in Europe which is slightly larger than the US car market.

Should I mention there plans in China which is the largest car market, especially for EV’s?

There’s still no reason to take your opinion seriously.

Look, I get that you are emotionally invested in Tesla Motors for a reason that I have no clue about. Maybe it is because you have one of their cars and really like it. Or you just really want one. Maybe you realize that Elon Musk has ten times the creativity, imagination, genius, and raw guts and perseverance that Steve Jobs ever did. He is an amazing man, even if he is more PT Barnum than Henry Ford. He was the right man to turn electric golf carts into sleek sports cars.

I have been interested in alternative sources of energy my entire life and would love it if electric powered passenger vehicles actually made sense. I have actually built electric bicycles, human powered generators and have purchased a large collection of human powered and alternative energy devices to study and play with. But except under specific circumstances, or with government subsidies and incentives electric cars still do not make sense as a primary vehicle for most families and people.

Will they make sense in the near future... in their current form with Lithium Ion battery systems, in the current energy environment, and without government subsidies and especially if the global warming nonsense is finally exposed... they will continue not to make sense. At some point however they will. But Tesla Motors is going to be fighting an uphill battle until then for all of the reasons that I have stated in my previous posts and more. It has been a tremendous and nearly unprecedented achievement carried largely by one man’s vision, the team that he assembled and the irrational exuberance of technology investors. Some of his other businesses would probably be safer investments at this time however.

Look, I get that you are emotionally invested in Tesla Motors for a reason that I have no clue about.

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I pretty much got involved in the Tesla threads because of all the poorly informed, one sided emotional comments from a good portion of FReepers.

Other than that I would know very little about them.

Living with an electric car for six months changed my mind about how I feel about them. I have range anxiety. When you're driving a Nissan Leaf, it has the equivalent energy in the battery pack of less than two gallons of gasoline. That not only tells you how energy dense gasoline is, but also how wildly efficient electric cars are, as the Leaf gets 150 miles on the equivalent of 1.2 gallons of gas. And while the benefits of electric cars are clear, for example instant torque, quiet ride, low CG, and much more emissions friendly, they do come with lower range and longer recharging times versus filling a gasoline tank. So after living with a 151 mile range Nissan Leaf for 6 months, how do I now feel about EVs? Quite different, actually. | Living With An Electric Car Changed My Mind | How Driving A 2018 Nissan Leaf Long Term Changed My View Of EVs | Engineering Explained | Published on Dec 2, 2018

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