Tesla Shares Crashing After Consumer Reports Pulls Model S Recommendation

Shares of Tesla heavily sold off by more than 5 percent Tuesday afternoon following Consumer Reports' withdrawal of its recommendation to own a Model S sedan.

The influential consumer magazine surveyed 1,400 Model S owners who offered a less than stellar review of their vehicle.

According to LA Times, Model S owners "chronicled an array of detailed and complicated maladies" relating to the drivetrain, power equipment, charging equipment and the center console.

Consumer Reports Note

"As the older vehicles are getting up on miles we are seeing some where the electric motor needs to be replaced and the onboard charging system won't charge the battery," the publication quoted Jake Fisher, Consumer Reports' director of automotive testing as saying.

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"On the newer vehicles we are seeing problems such as the sunroof not operating properly. Door handles continue to be an issue."

Investor And Trader Response

Investors and traders appear to be working under a new assumption that Tesla now faces quality issues with future models. The timing of the report may have added more fuel to the fire, as it came so soon after the Model X launch and ahead of a potential introduction of the much anticipated Model 3 sedan.

Drastic Change Of Recommendation

Perhaps even more concerning is the fact that Consumer Reports awarded the Model S P85D with a 103 point score out of a possible 100 back in August.

Fisher also added in his report that "this poses the question whether they will be able to keep quality up as they increase volume and add models to the mix."

Consumer Reports doesn't officially include Tesla within its annual ranking of 28 auto brands as the company only sold one vehicle up until a month ago.

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