The J.D. Power 2020 Initial Quality Study (IQS) has found that buyers of Tesla Inc.’s (NASDAQ: TSLA) vehicles report more issues with their vehicles in the first 90 days of ownership compared with other new vehicle owners.
What Happened
The J.D. Power 2020 Initial Quality Stud is a survey of issues encountered by new car owners of the latest model cars.
Tesla was profiled for the first time in the IQS. The automaker scored 250 and ranked the lowest among all the manufacturers covered in the study.
Tesla’s ranking in the study is not official, as it does not meet the study’s criteria.
Doug Betts, president of the automotive division at J.D. Power, said, “unlike other manufacturers, Tesla doesn’t grant us permission to survey its owners in 15 states where it is required.”
Betts revealed how Tesla was ranked, saying, “we were able to collect a large enough sample of surveys from owners in the other 35 states and, from that base, we calculated Tesla’s score.”
Why It Matters
The industry average for 2020 model vehicles was 166 problems per 100 vehicles. The top-ranked manufacturers were Fiat Chrysler Automobiles NV’s (NYSE: FCAU) Dodge and Kia Motors Corporation, both tied at 136 problems per 100 vehicles.
According to Dave Sargent, vice president of automotive quality at J.D. Power, vehicles with less technology typically perform better in the study.
Betts told CNBC in an email that Tesla’s issues range from paint imperfections, poor fit of body panels, trunks and hoods, which are hard to open as well as squeaks and rattles.
Tesla’s failing touch screens have recently attracted an investigation from the U.S. National Highway Traffic Safety Administration.
Price Action
Tesla shares traded 1.03% lower at $951 in the after-hours session on Wednesday. The shares had closed the regular session 4.09% lower at 960.85.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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