Tesla Model S Loses Consumer Reports Nod While Model 3 Rates Average

(Bloomberg) -- The Consumer Reports annual auto reliability survey is out, and Tesla Inc.’s Model S has again lost a recommendation from the magazine after its rating fell to below average. The Model 3 gets an average grade, good enough to keep its recommended status.

Key Insights

• Five of the six top brands for reliability were Japanese, led by Lexus, Toyota and Mazda, whose fixes to the CX-9 SUV and MX-5 Miata roadster fueled the most improvement in this year’s survey -- a nine-spot jump in the rankings.
• Eleven of the 12 least-reliable brands were American, with Buick dropping the most -- 11 spots -- on problems with its Enclave SUV.
• Model S reliability has declined as owners have reported suspension problems and issues with door handles; the Model X SUV remains much worse than average, due to its balky falcon-wing doors and center display screen.
• Chinese-owned Swedish brand Volvo falls six spots to rank worst in the survey, plagued by infotainment system issues and reports of rattling sounds in the interior cabin.
• Ford fared best among U.S. automakers with its namesake brand ranking 18th, though one of its top-performing models -- the Taurus sedan -- is getting dropped from the lineup.

Market Reaction

• Tesla shares briefly dipped after the Consumer Reports’s results, then recovered to trade up 0.5 percent as of 1 p.m. Wednesday in New York.

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• Tesla Chief Executive Officer Elon Musk took Consumer Reports’ recommendations seriously enough to get on the phone with the magazine’s director of testing when it rebuffed the Model 3 sedan in May over poor braking performance.
• Within days, Tesla released an over-the-air software update that improved stopping distance by almost 20 feet, and Consumer Reports said it would reinstate the car’s recommended status.
• Consumer Reports also temporarily lowered and then restored its ratings on the Model S and Model X last year after Tesla took months to bring its automatic emergency braking system back to an acceptable level of performance.

To contact the reporters on this story: David Welch in Southfield at dwelch12@bloomberg.net;Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Cecile Daurat

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