Tesla Model 3 loses Consumer Reports recommendation

Posted February 26, 2019

Shares of Tesla fell 3.75% on Thursday after Consumer Reports raised questions about the reliability of the automaker's Model 3.

"When we look at the Model 3 a lot of the issues are the electronics". The latest vehicle to lose that CR designation: the Model 3, which, despite getting a big thumbs-up from consumers in terms of owner satisfaction, and from CR in its road tests, fared poorly in the group's annual reliability survey.

A Tesla spokesperson said the company takes customer feedback "very seriously", and noted that Tesla has topped Consumer Reports' owner satisfaction survey every year since it was first included in 2013.

In response to the issue, Tesla spokesperson told consumer reports that "the vast majority of issues have already been corrected through design and manufacturing improvements, and that Tesla is already significantly implementing improvements".

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The Model 3, which costs about $44 000 (R616 000) in the U.S., is critical for Tesla, which hopes it becomes a mass market vehicle.

Consumer Reports dropped the Tesla Model S luxury sedan from its recommended list past year.

While vehicle sales in China have waned as the economy slowed, Tesla's business was hit hard after Beijing raised tariffs on United States auto imports to 40 per cent in July amid the trade row.

Tesla has made some compromises in designing this mid-end Model 3.

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The magazine's decision to withdraw its endorsement, less than nine months after recommending the electric sedan, raised questions about quality that Tesla has faced since the Model 3's hard launch. Declining reliability caused the Overall Scores of these vehicles to fall below that threshold.

Consumer Reports' refusal to endorse cars that lack technology that automatically applies brakes disqualified a wide swath of popular brands and models, including General Motors Co's Chevrolet.

Tesla Inc.'s top lawyer, Butwinkas had joined the electric carmaker in last December and he had been reporting directly to the Chief Executive Officer, Elon Musk.

The organization said Thursday that negative reports on reliability surveys sent the Model 3 and the Chrysler 300 "tumbling 11 spots" toward the bottom of its auto brand rankings. But they're also telling us that when it comes to reliability, they're not the best. "Essentially, the company was bleeding money like insane, and if we didn't solve these problems in a very short period of time, we would die".

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