Surveyed Tesla (NASDAQ:TSLA) Model S owners "chronicled an array of detailed and complicated maladies" when it comes to reliability, according to a Tuesday report from Consumer Reports (via the L.A. Times). The survey prompted CR to reduce the sedan's rating of predicted reliability of new vehicles from "average" to "worse-than-average." Shares slid as much as 11% after the report made headlines, and shares are down about 7% at the time of this writing.

Model S. Image source: Tesla.

While CR rates many auto brands as having worse-than-average reliability, the importance of brand perception at this point in the company's story is key. In Tesla's attempt as a young automaker aiming to garner rapport with current and potential customers, reports like these are more relevant to Tesla than they are to its established peers.

The problems
Commonly cited problems among CR's Model S owner respondents were related to the drivetrain, power and charging equipment, the 17-inch display, and body and sunroof squeaks, rattles, and leaks, the magazine said.

With the first Model S delivery having begun in 2012, CR is concerned that evidence from early versions of the sedan suggest predicted reliability is subpar.

"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," CR director of automotive testing Jake Fisher said.

And newer versions of Model S aren't looking too hot in regard to predicted reliability, either, Fisher explained: "On the newer vehicles, we are seeing problems such as the sunroof not operating properly. Door handles continue to be an issue."

As Tesla is a young automaker trying to convince consumers that battery-powered tech is superior to internal combustion engines, investors have good reason to be concerned with CR's worse-than-average reliability rating for Model S.

CR's report may be particularly surprising to some given that the rating agency recently awarded the P85D variant Model S a perfect road-test score. But road tests and predicted reliability are unrelated, Fisher says. CR road tests exclusively judge performance, comfort, and road manners.

The news comes less than a month after the company delivered its first Model X SUV, which doubles Tesla's available vehicles for sale since the Model S was previously the electric-car maker's only vehicle available for purchase. Given that Tesla's Model X was loaded with complex and unprecedented engineering feats -- particularly an oversize windshield and falcon-wing doors -- this worse-than-average reliability for Model S raises concerns about whether or not the company could continue to struggle with reliability longer-term.

Model X. 

Ahead of the Model X launch, Musk cited problems with the SUVs falcon-wing doors and the second-row seats as engineering challenges. Could the very features that make Model X stand out represent future challenges in reliability for the vehicle?

Despite the market's obvious concern with this reliability report, investors should put these issues in perspective with the service Tesla owners are provided. Maintaining active relationships with customers, the car maker tries to be proactive in spotting problems when possible, and to rapidly fix any issues. Indeed, CR's own survey found that Model S owners rate Tesla's service second to none.

Furthermore, even electric drivetrain replacements for Tesla vehicles are minor compared to most of the labor-intensive work required for internal combustion engines. Tesla is able to replace a drivetrain with same-day appointments. Pairing this first-rate service with the reliability issues, CR noted in a Tuesday blog post about its Tesla predicted reliability score that owner satisfaction is still very high.

"Ninety-seven percent of owners said they would definitely buy their car again," CR explained. "It appears that Tesla has been responsive to replacing faulty motors, differentials, brakes, and infotainment systems, all with a minimum of fuss to owners.

Currently, the concern here is with Tesla's brand -- not the financial viability of maintaining a high level of service if reliability issues persist. Investors can view the company's warranty reserves on its financial statements, and there's no surprising rise in warranty costs. When Tesla filed its second-quarter financial results, warranty costs accrued as a portion of accrued warranty reserves were 11%. This compares to 13% in the year-ago quarter.