Please ensure Javascript is enabled for purposes of website accessibility

Is Tesla Motors, Inc. Teaching Mercedes-Benz a Lesson on Making Reliable Cars?

By Daniel Sparks - Oct 30, 2014 at 4:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

"Consumer Reports" is out with a new report about Tesla's all-electric sedan.

Model S interior. Source: Tesla Motors.

Consumer Reports is out with a new report that includes some mad props for Tesla Motors(TSLA -0.60%) all-electric sedan. Not only is the reliability for the Model S improving, but the young auto manufacturer is one-upping its older and more experienced peers. Here's what you need to know.

Average, but better than key competition
Overall, Tesla's Model S is Consumer Reports' top-scoring car. The luxury sedan garnered a wild score of 99 out of 100 from Consumer Reports' own judges, and a 99 out of 100 in the rating agency's owner survey. But as Consumer Reports explains in a new report, this doesn't mean it's the most reliable car. In fact, CR only gives the Model S an "average" reliability score.

A bit of perspective, however, from the latest update on the Model S shows that an average reliability score is still an achievement.

Model S. Source: Tesla Motors.

"In the grand scheme of things, an average score, while not impressive, isn't terrible either," said Consumer Reports' Gabe Shenhar. "Lots of high-end cars have an average score, including, for instance, the Acura RLX. A few, largely from Lexus and Audi, are outstanding, but many, such as the Mercedes-Benz S-Class and Cadillac XTS, are far worse."

Tesla is cracking down on quality control
Consumer Reports' tone toward the reliability of the Model S has shifted dramatically. In August, Shenhar wrote: "Given the number of bits and pieces Tesla has replaced on our car, it might be tempting to guess that its reliability score will go down. The reality is, it might." The decision, he said, would be based on "the frequency and severity of problems reported by our subscribers and whether they show that reliability is below average."

But Shenhar's guess was off-base. As it turns out, reliability for the Model S is actually improving. "Tesla has been aggressively updating and redesigning parts to improve reliability," Shenhar explained in a short video outlining the new reliability report. "This is evident in our data, with newer Model S's proving more reliable."

The front trunk in a Model S. Tesla cites "at least a thousand fewer moving parts than a traditional car" as one of the key advantages of the maintenance profile on its fully electric vehicles. Image source: Tesla Motors.

Amid a report from earlier this year that cited frequent drive-unit replacements for the Model S, and Consumer Reports' own prediction of a decline in reliability, quality control was a hot topic in Tesla's last earnings call. After the company provided helpful perspective on drive unit replacements, and ensured investors that it was aggressively taking action to improve the quality of build for its vehicles, the concern faded into the background.

Considering Tesla's progress on quality control to date as a young automaker, and the advantages that CEO Elon Musk asserts its electric cars will eventually have over traditional vehicles in achieving a lower maintenance profile, Tesla competitors may be wise to lean in and learn a thing or two from the California-based company.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$732.69 (-0.60%) $-4.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.