Starting a new car company in the 21st century is not an easy thing to do, but Tesla Motors has been the exception, as it has evolved into a successful company whose valuation is in the billions of dollars. But reliability issues and teething problems prove that building cars is not an easy thing.
Consumer Reports recently yanked their “recommended” rating from Tesla’s flagship, the Model S, citing too many issues and complaints. The issues range from small things like squeaks and rattles – which are more obvious in a quiet electric car – to large problems like failing motors and retractable door handles that don’t pop out, essentially locking out the owner.
Other complaints include problems with the digital infotainment system, misaligned trunk and hatchback latches and wheel alignment issues.
The news caused Tesla‘s stock to drop nearly seven percent.
Tesla, despite their successes, is still a niche player in the automotive world. The cost of entry for the Model S is well north of $100,000, making the S an exclusive car that’s not yet intended for mainstream buyers. In this market segment, the Tesla’s style, performance and prestige – along with the unique drivetrain – are still enough to overcome any shortcomings. But the question is, would an established high-end auto manufacturer be able to get away with the quality and reliability issues of the Model S?
If a $100,000 Mercedes-Benz or BMW had these issues, would the companies be able to get away with it? Since Tesla is relatively new, it can still bank on its technology and image to draw in customers despite the issues. The company’s customer service is highly rated and problems are fixed at no cost to the owners. As Tesla is looking to get into the mainstream with the lower-cost Model 3, are mainstream owners ready to essentially become beta testers for the company?
As the company grows, it will have a harder time excusing the problems that caused the S to lose its Consumer Reports recommendation. The upcoming Model X crossover has complex “Falcon-wing” rear doors that seem to answer a question no one asked. Tesla might just be putting in technology for the sake of technology.
Established companies know what works in a car and what doesn’t. While that may mean they take less chances than an upstart like Tesla, it also means better reliability. Does a car need automatic retractable door handles when regular handles work just fine? Same with those gull-wing doors. Unless there’s a demonstrated advantage to them, it’s hard to see how they are a better idea than regular doors.
Tesla is an innovator in the market and has already done enough to disrupt the industry. Other companies are now looking at all-electric luxury sedans. Volkswagen is planning the next Phaeton to be an all-electric vehicle, and Porsche showed the Mission E all-electric car at the Frankfurt Motor Show. These established companies may be able to build an all-electric Tesla fighter with fewer reliability issues because they already know how to build reliable cars.
As Tesla moves into the mainstream, the company needs to get past its teething issues and find a balance between innovation and reliability. If not, it may end up crashing as quickly as it has risen.
Check out this TFLcar review of BMW’s electric car, the 2015 i3: