Nearly 10,000 Tesla Model X and Model Y SUVs are being recalled for a series of safety-related defects underscoring the automaker’s ongoing problems with quality and reliability.
Tesla has faced an array of issues affecting its four product lines, ranging from defective paint to faulty suspension systems and failing touchscreens used to control vehicle operations. Federal safety regulators recently launched a probe into one of the problems, while Consumer Reports and J.D. Power have slammed Tesla for having some of the worst quality and reliability in the industry. The automaker was also hit with a class-action lawsuit alleging a quality cover-up on Friday.
Those problems have largely been ignored by Wall Street, however, Tesla’s market capitalization now topping $525 billion, or about the same as Toyota, Volkswagen, General Motors, Nissan, Honda and Daimler combined.
(Mazda tops annual Consumer Reports reliability study, Tesla slammed.)
For the moment, at least, Tesla owners have been reasonably forgiving, said Stephanie Brinley, principal auto analyst with IHS Markit, reflecting an early adopter mindset. But, longer term, Brinley said “Tesla is at risk.” The company “needs to get quality and recalls under control.”
Tesla has faced problems with quality from Day One. While Consumer Reports initially called the automaker’s first volume product, the Model S, the best vehicle it ever tested it quickly withdrew its coveted “Recommended Buy” endorsement due to serious quality issues.
In the annual Consumer Reports Automotive Reliability Study released last week, Tesla ranked second to last among 26 brands. Some of the problems were high-tech, such as faltering touchscreens, but others were much more basic, such as ill-fitting body panels, paint defects and seats not properly attached.
“A focus on the basics would help them a lot,” said the influential magazine’s auto testing chief Jake Fisher. Tesla continues to struggle with problems, he said, that “other automakers worked out 50 years ago.”
Tesla’s problems with fit-and-finish have been so common, and occasionally so severe that one new owner last month had the roof of his new Model Y fly off as he drove home from the showroom last month.
Each of the automaker’s four product lines appear to have its own unique – and ongoing – issues. With the Model X, for example, that includes “Falcon Wing” doors that can’t close properly. The Model Y has similar problems with its hatchback, according to Fisher, along with rear seats that have been improperly mounted.
Some issues stretch across the entire Tesla line-up, notably problems with paint and body trim. And then there are the faulty touchscreens.
Earlier this year, the National Highway Traffic Safety Administration began probing reports that the automaker’s touchscreens, especially those on older Model S sedans and Model X SUVs, would suddenly start to malfunction and even “brick,’ or go completely dead, unexpectedly. The issue appears to be related to a faulty eMMC, or embedded Multi-Media Memory Card. Though the issue has been widely reported on Tesla owner forums, the company only acknowledged it publicly this month, announcing plans to make free repairs.
“This malfunction may result in a blank or intermittently blank touchscreen but will not impact the ability to drive your car,” the automaker said in a note to impacted owners.
(NHTSA expands probe into Tesla touchscreen issue.)
But the statement isn’t entirely accurate, according to Fisher. While the vehicles won’t shut down, he explained during an online meeting with the Automotive Press Association, a driver won’t be able to operate many vehicle functions, since the screen replaces most traditional buttons and knobs. And motorists won’t be able to see how fast they are going or even be sure what gear they are in.
Tesla’s latest safety recalls are relatively minor in terms of the numbers. NHTSA today said the larger one covers 9,136 Model X SUVs from the 2016 model-year. They have roof trim that may not have been properly adhered and which could fly off while being driven, striking other vehicles or pedestrians.
The second recall covers just 401 of the new Model Y SUVs. Bolts connecting the front upper control arm and steering knuckle may not have been properly assembled. They could detach and cause a loss of control.
Separately, a new class-action lawsuit filed in federal court in California last Friday claims Tesla has covered up suspension issues on older Models S and X vehicles. “Tesla is gambling with the lives and safety of hundreds of thousands of additional drivers and passengers whose vehicles suspension parts [are] at an imminent risk of failure,” the lawsuit stated, adding that the automaker has recalled most of those models sold in China for the same defect.
Time and again, Tesla has been hammered for quality and reliability problems. The automaker has limited access to the data normally used by J.D. Power to assess out-of-the-factory problems. Until this year, the research firm left Tesla out of its widely followed Initial Quality Study. This year, however, it decided to use what information it could track down and, though the results were marked with an asterisk, it came in dead last – and by a wide margin, according to Power’s auto research chief Dave Sargent.
Complicating matters, Tesla operates in a hodgepodge of states and vehicles often have to be trucked long distances in order to undergo repairs. Tesla forums are filled with reports of lengthy waits for parts and service.
Tesla is by no means the only automaker with quality problems. Ford’s Lincoln division fared even worse in this year’s Consumer Reports Auto Reliability Study, and research chief Fisher noted there were problems plaguing several other battery-car models. But while “there are a couple of EVs that gave us pause, there were many other very good models.”
Until recently, Tesla had the market pretty much all to itself, at least in terms of long-range battery-electric vehicles. But there’s a tsunami of new models coming from manufacturers as diverse as Ford, Hyundai, Volkswagen, General Motors, BMW and Mercedes-Benz.
In China, the Wuling Mini, produced by a GM joint venture, recently displaced Tesla as the country’s best-selling EV. The California company has also been losing ground in several key European markets, though it remains, by a wide margin, the best-selling EV brand in North America.
(Tesla Model Y hammered by quality issues.)
“Consumers are often forgiving” when they have to get repairs, “as long as they feel they’re taken care of,” said analyst Brinley. That’s especially true, she added, for early adopters, many Tesla owners feeling an almost cult-like devotion to the brand. But with more competition coming, and with no sign Tesla has yet begun to get its quality and reliability issues under control, she and other analysts warn that could pose problems going forward.
