Tesla Motors Inc (TSLA): Some Insights on Consumer Reports’ Critique on Model S

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Tesla Motors Inc (NASDAQ:TSLA) launched their model S sedan in June 2012. Since then the sales of this vehicle grew rapidly. Global sales of this vehicle surpassed the 25,000 mark in December 2013. Tesla Motors Inc (NASDAQ:TSLA) delivered a total of 6,457 vehicles in the first quarter of 2014, which was above their guidance. This also positioned the company on track to meet their 2014 target of 35,000 deliveries. Amidst all the positives, some issues were raised by Consumer Reports. CNBC’s Phil LeBeau talked about this in a segment on CNBC.

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LeBeau said that the Consumer Reports  praised the Tesla Motors Inc (NASDAQ:TSLA)’s model S sedan and said that their staff enjoyed driving this sedan. He pointed out that the Consumer Reports has chronicled what happened over the year of their ownership of the model S sedan.

LeBeau quoted part of a review from Consumer Report, “[…] the center screen went blank, eliminating access to just about every function of the car, including popping open the charge port. The shop, a newly opened service center in Milford, CT, […] performed a ‘Hard Reset’ that restored the car’s functions. It also fixed a creak emanating from the passenger side roof-pillar area, disassembling and refitting some assembly panels.”

LeBeau added that Tesla Motors Inc (NASDAQ:TSLA) has fixed the problems as soon as it was reported to them and the owner was covered by the warranty. He quoted the Tesla’s statement on this, “We take these actions with the customers’ convenience and satisfaction top of mind and strive to go above and beyond the expected level of service. Like any owner, Consumer Reports benefits from the piece of mind afforded by the comprehensive Tesla warranty.”

He said that the Consumer Reports has blocked the Model S with this review in mind. He pointed out that all the reviews in Consumer Reports were from their staffs and not from general public. He thinks that review from the Consumer Reports might not push a new consumer to completely walk away from Model S, but he feels that for the price tag of $90,000, this vehicle is not supposed to even have these minor issues.

“[…] So it will be interesting to see when the full reliability report comes out next month from consumer reports. What owners of the Model S have to say? Remember, last year it got an average rating from consumer reports based on the critique of Model S owners,” LeBeau added.

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