tesla stock price consumer reports
Tesla Model S owners are familiar with the electric car's "insane mode," but shareholders are learning about a new setting: "panic mode." | Source: Shutterstock

Tesla Stock Enters Panic Mode after Consumer Watchdog Issues Scathing Report

Tesla has been on a tear in ramping up production of its Model 3. However, the automaker’s efforts may be in vain.

Model 3 buyers say they aren’t satisfied. Their unhappiness was reflected in an annual survey conducted by Consumer Reports. As a result, it said it could no longer recommend the vehicle that’s become Tesla’s flagship.

On the news, Tesla’s stock took a dive, as investors continue riding the roller coaster that comes hand in hand with being in Elon Musk’s passenger seat.

From Crème de la Crème To Plain Vanilla

Tesla Model 3

Consumer Reports said it would no longer recommend the Tesla Model 3. | Source: Shutterstock

Scathingly, Consumer Reports said it would no longer recommend the newest the Model 3 because owners say they’ve identified a number of problems with their cars.

Issues include the vehicles’ body hardware, such as its paint and trim. Consumer Reports said the issue of reliability had been a weak spot for Tesla.

“According to our survey results, problems with the suspension, especially with the 2017 model year, have been an issue for the Model S luxury sedan, while hardware problems—especially concerning its unique falcon-wing doors—have plagued the Model X SUV (neither is currently recommended by CR).”

“The new survey data shows that the car has dropped from average to below-average reliability.”

Consumer Reports used the results from its members who reported their concerns as part of the group’s annual reliability survey.

Consumer Reports noted the Model 3 is a “critical car for Tesla,” considering it is the first attempt made by the automaker at a true mass-market electric vehicle.

Its findings led it to drop its ranking for Tesla to 19 from 8. That is out of 33 brands ranked by the group.

Interestingly, Toyota made Consumer Reports’ list of the best new vehicles of 2019. It had been thought that  Tesla’s Model 3 was a viable competitor to the Japanese automaker.

Go-to Buying Source Can’t Vouch For Model 3

Jake Fisher, senior director of automotive testing at Consumer Reports, said the organization encountered numerous reliability issues related to the Model 3’s 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.”

Here’s an excerpt from the Consumer Reports statement:

“Model 3 owners in our spring survey sample reported some body hardware and in-car electronics problems, such as the screen freezing, which we have seen with other Tesla models. The latest survey data also shows complaints about paint and trim issues. In addition, some members reported that the Model 3’s sole display screen acted strangely.”

Tesla Stock Takes a Dive

tesla stock price

Tesla stock has had a rough week.

These latest issues for Tesla come after observers have weighed in on all its woes. Some have even suggested that being bought could be the best bet for the automaker.

Freddie Lait, the chief investment officer at Latitude Investment Management, said that Tesla’s $52 billion valuation makes it a very attractive takeover target for Apple, which is sitting on nearly $250 billion in cash. CCN reported on the idea of an Apple-Tesla merger being floated around for years.

Lait said:

“It’s quite possibly going to get bought out for that valuation because it represents what that is.”

As it is, Apple is working on its own electric car venture called the Titan, so a merger between the two corporate juggernauts would be synergistic.

Tesla CEO Elon Musk was oddly silent on the consumer news. There are no tweets from him on the matter on his Twitter feed.

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