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Tesla under fire again as US Consumer Reports slams reliability of Model S sedan, causing shares to dive

PUBLISHED : Wednesday, 21 October, 2015, 2:55pm
UPDATED : Tuesday, 24 November, 2015, 12:01pm

Consumer Reports said it would no longer recommend Tesla’s Model S sedan due to reliability concerns, in a blow to the luxury electric-powered car initially awarded the highest-ever score in the US magazine’s performance ratings.

The decision, based on the influential publication’s annual survey of vehicle reliability, sent shares of Tesla Motors reeling and underscored the risk of introducing cutting-edge fuel-saving technology and digital multimedia systems in vehicles.

READ MORE: Tesla unveils ‘autopilot’ for its electronic Model S cars but urges caution in early stages

Consumer Reports found "an emerging trend of increased troubles" with a broad range of vehicles that use new transmission technology to boost mileage. The survey was presented by the magazine’s editors at a meeting of Detroit’s Automotive Press Association on Tuesday.

The findings illustrate automakers’ challenges as consumers and regulators demand more innovation. Groundbreaking technology comes with a heightened risk of malfunctions over the life of a vehicle, compromising the reliability car owners enjoy from more mature technology.

Tesla’s stock fell as much as 11.4 per cent before closing down 6.6 per cent to US$213.03 after the magazine said Tesla owners reported "an array of detailed and complicated maladies" in their Model S sedans.

Still, 97 per cent of Tesla owners would buy another Model S, the magazine found, citing quick responsiveness on repairs from the Palo Alto, California-based company "with a minimum of fuss to owners."

One of the most technologically adventurous cars on the market, the Model S registered a worse than average reliability score based on survey responses from 1,400 owners.

The battery-powered Model S P85D was lauded in August for racking up the best scores ever in the magazine’s performance tests. But owners complained of rattles, leaks and problems with the charging equipment, drivetrain and centre console displays, Consumer Reports said.

"Close communication with our customers enables Tesla to receive input, proactively address issues, and quickly fix problems," a Tesla spokesperson said.

READ MORE: Watch out, Tesla: China's NextEV plots even faster 'electric supercar' amid backing from Tencent, JD.com, Hillhouse Capital

"Over-the-air software updates allow Tesla to diagnose and fix most bugs without the need to come in for service. In instances when hardware needs to be fixed, we strive to make it painless."

Complaints about baulky multimedia infotainment systems continue to plague several major automakers, including Ford Motor, Nissan Motor, Fiat Chrysler and General Motors, the magazine found.

Honda Motor's Acura luxury brand fell seven places to No. 18 in the magazine’s ranking of 28 brands because of problems with transmissions and in-car entertainment systems.

Overall, Toyota Motor's Lexus brand was the top-ranked brand in the magazine’s reliability survey. The highest-ranked Detroit brand was GM’s Buick at No. 7.

Fiat Chrysler's Fiat brand came in last.