Tesla Falls After Consumer Reports Pulls Model 3 Recommendation

Model 3

Tesla Inc (NASDAQ: TSLA)

Shares of Tesla fell 3.75% on Thursday after Consumer Reports raised questions about the reliability of the automaker’s Model 3. The report said many Model 3 customers reported problems such as glass defects and loose body trim.

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

“Consumers expect their cars to last — and not be in the repair shop. That’s why reliability is so important,” said Fisher. The nonprofit consumer advocacy organization pulled its “recommended” rating for the Model 3. The car received the recommendation last year after getting an update that enhanced its brakes.

Consumer Reports also lowered ratings for several other vehicles including the Dodge Charger, Acura RDX, and Chrysler 300 due to problems with in-car electronics. The Volkswagen Tiguan and the BMW 5 Series also had their ratings lowered over issues with body control modules and power equipment, respectively.

A Tesla spokesperson said that the electric car maker has already addressed the issues raised in the complaints aggregated by Consumer Reports. The spokesperson further noted that the company is setting very high standards for itself regarding the production of Model 3.

“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 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.”

Tesla, Inc. Profile

Tesla, Inc. engages in the design, development, manufacture, and sale of fully electric vehicles, energy generation and storage systems. It also provides vehicle service centers, supercharger station, and self-driving capability. The firm operates through Automotive, and Energy Generation and Storage segments. The Automotive segment includes the design, development, manufacture and sale of electric vehicles.

The Energy Generation and Storage segment includes the design, manufacture, installation, sale, and lease of stationary energy storage products and solar energy systems, and sale of electricity generated by its solar energy systems to customers. The company was founded by Jeffrey B. Straubel, Elon Reeve Musk, Martin Eberhard, and Marc Tarpenning on July 1, 2003 and is headquartered in Palo Alto, CA. – CNN Money