Consumer Reports has no financial relationship with advertisers on this site.
Consumer Reports has no financial relationship with advertisers on this site.
It’s a crucial moment for electric-car maker Tesla.
CEO Elon Musk unveiled the Model Y crossover SUV at a Thursday night event in Los Angeles. The car represents the next step in Tesla’s evolution from a maker of expensive luxury electric vehicles to a company that could upend, in lasting ways, how cars work and what it means to own an EV.
Tesla needs the Model Y in its arsenal—a small crossover is a lot closer to the kind of vehicle most Americans are buying now. Tesla needs to execute on delivering this class of vehicle.
There has been positive momentum for the company lately. The $35,000 Model 3, promised for three years, finally went on sale at the end of last month. The automaker also announced that it’s launching more powerful charging stations that could restore as much as 75 miles of range in just 5 minutes.
It might seem like all is falling into place for the drama-filled EV company. But consumers should pay attention to what’s being promised—and to what actually happens.
Add to it the swirl around Musk, and any car shopper might be justified in questioning the company’s long-term future and sustained investment in customer service.
In just the past month, Musk announced that Tesla would shutter most of its showrooms—and then reversed course little more than a week later. The SEC is looking into his Twitter activity, and the company has flip-flopped on prices, cutting them and then nudging them back up, among other controversies.
Regardless of the buzz that Tesla generates, it matters most how well the company can handle the basics: building cars, providing top-notch customer service (not just at sales time but also for maintenance and repairs), and inherently delivering on its promises.
“Tesla from the very beginning has been a high-wire act,” says Mike Gartner, an automotive analyst with Gartner. “They’ve constantly been hyping way past what they can deliver. But when they deliver something it’s been good.”
What should consumers looking to buy a Tesla make of the company and all the drama? Below are more details on the Model Y, along with questions consumers should be thinking about before they commit to buying a Model Y—or any Tesla.
Model Y Specs
At the Thursday event, Musk revealed the details on Tesla’s latest crossover. Onstage, the Model Y looked like a slightly taller version of the Model 3, but Musk says it will seat up to seven passengers.
The first versions available will be the Long Range and Performance trims. That’s the same approach the car company took with the Model 3. These Model Y trims start at $47,000 and $60,000, respectively, and are scheduled to arrive in fall 2020, Tesla says.
The entry-level Model Y trim, called Standard Range, won’t begin production until early 2021, according to the Tesla website.
Buyers can put deposits down now on the Long Range and Performance trims on the website, which also provides specs for those versions.
The Model Y Long Range with rear-wheel drive should get 300 miles of range on a full battery, go from 0 to 60 mph in 5.5 seconds, and reach a top speed of 130 mph. One with all-wheel drive will get 280 miles of range and hit 60 mph in 4.8 seconds, with a top speed of 135 mph.
The specs for the Performance trim live up to its name: Tesla says it will go 280 miles on a full charge, go from 0 to 60 in 3.5 seconds, and have a top speed of 150 mph.
When the lower-cost Standard arrives (it is expected to start at $39,000), it will have a 230-mile range, Tesla says.
All Model Y versions will come with forward collision warning, automatic emergency braking, and blind spot warning, the company says. Autopilot, with its semi-autonomous features, and Full Self-Driving capability are each offered as options. Autopilot costs $3,000, and the Full Self-Driving tech costs an additional $5,000, if they’re bought with the car. If shoppers wait until after they’ve bought the car, the prices rise for both.
Will Tesla Be Tardy With Model Y?
A major sticking point for Tesla has been meeting targets for new vehicles. It has been consistently late, sowing doubt among investors and consumers. There also have been long delays between when Tesla said a new model would arrive and when it began to be widely available, as the automaker has repeatedly broken self-imposed deadlines.
But Tesla had always emphasized that the importance of the Model 3 was the ability to sell it at $35,000—close to the average price of a new car in the U.S. Until this month, most Model 3 sales were for configurations sold at $50,000 or more.
The automaker’s website says delivery of the $35,000 Model 3 will take six to eight weeks after a buyer orders one.
In response to a question from CR, Tesla said that its website provides the latest, most up-to-date time frames for delivery. The delivery estimate for new orders of the base Model 3—originally estimated on the website at two to four weeks—became longer because of the volume of orders, it said.
Overpromising of another kind has plagued the automaker’s Full Self-Driving capability. Tesla collected $5,000 from consumers for the feature for years without delivering added functionality. The timetable for delivering slipped so much that Tesla stopped taking deposits for a while. Now the company is offering some features that work, such as on-ramp to off-ramp Navigate on Autopilot on highways, and some that the company says will be activated later this year, including “automatic driving on city streets.”
And whenever it does come, Full Self-Driving capability won’t be what its name suggests. It’s unlikely that Tesla will soon achieve full autonomy, where the human driver won’t need to pay attention to what’s happening on the road, says William Wallace, senior policy analyst with Consumer Reports. Wallace added that the safety of the new feature will need to be proved, especially given CR’s low ratings of Autopilot’s safety protections and the documented crashes related to that system’s use.
Tesla said customers who purchased Full Self-Driving capability in 2016 and 2017 were made aware that the functionality “is dependent upon extensive software validation and regulatory approval, which may vary widely by jurisdiction,” and that it was impossible to know exactly when the feature would become available.
How Good Are Tesla’s Vehicles? Are They Reliable?
Consumer Reports establishes an Overall Score for every vehicle we test. We consider its road test, owner satisfaction, safety, and reliability scores. All three of Tesla’s available models score well in the first three categories—but all rate below average in reliability, based on reports from CR members in our exclusive Auto Survey.
If the reliability of any of the Tesla models improved—again, based on reports from owners—each could gain a CR recommendation and the Model S would be among the highest-rated vehicles in its class.
In our survey, Tesla owners have reported numerous problems involving the air suspension, doors, and electronics.
Part of Tesla’s reliability problems can be chalked up to how frequently the company re-engineers its models, says Jake Fisher, senior director of auto testing at Consumer Reports. Unlike other automakers, Tesla doesn’t save changes for a new model year. It has substituted new parts—including major items, such as motors and suspension components—a few months after introducing a model, Fisher points out. It can take time for any automaker to work out reliability problems with the parts changing so frequently.
Even with the bugs, Tesla tops CR’s owner-satisfaction survey, outstripping brands such as Porsche and Genesis—ranked second and third, respectively—for the top spot. Its Overall Score of 89 puts it well ahead of other luxury brands such as Audi (74), BMW (73), and Mercedes-Benz (67).
“If being an early adopter is very important to you, you might be very happy buying a Tesla,” Fisher says. “You’ll get cutting-edge technology, but you may have to deal some bugs.”
We asked Tesla to outline any steps it might be taking to improve reliability, and the company declined to answer.
How Hard Is It to Service a Tesla?
One of the biggest questions for consumers will be how easy it will be to line up repairs when needed. Compared with most traditional automakers that maintain networks of franchised dealers, most with their own service bays, Tesla has relatively few options for customers needing service.
Tesla’s service centers are concentrated in larger cities and heavily populated states. According to the list of locations on Tesla’s website, 24 states don’t currently have a service center. Texas, the second-most populous state, has six service centers. Pennsylvania has two.
In January, Musk said it would be easier to scale up its mobile-service fleet than the physical service centers.
When Musk announced the arrival of the $35,000 Model 3 on Feb. 28, he promised to improve service for Tesla customers. Musk said that Tesla would be “significantly increasing head count in service technicians” and that he is directly overseeing service operations. The goal will be same-day, “if not same-hour,” service, performed by Tesla’s mobile teams coming to the customer’s vehicle rather than at service centers, he said.
“My top priority this year is making service amazing at Tesla,” Musk said.
Yet days after that call, Tesla reportedly laid off several dozen service specialists, calling those claims into question. The company did not answer a CR question about the laid-off service employees.
Tesla handles replacement parts differently as well. Franchised car dealerships usually carry a 15-day supply of frequently needed parts for the vehicles they sell. Not so with Tesla—it ships all its parts from its factory in Fremont, Calif. Some customers, like those at the online Tesla Motors Club, have reported delays of weeks or even months for parts to become available.
Musk said in January that the company had made a strategic mistake in the past by not having parts at service centers, so even simple repairs would take days, he said. He said that going forward, the company would stock parts at service centers so that repairs would be “lightning fast.”
Will Online-Only Sales Make It Easier to Buy a Tesla?
Tesla has fought state by state to be able to sell its vehicles without a traditional dealer network. In his Feb. 28 announcement, Musk said Tesla would move all sales to online only and would close many of its current showrooms.
All Teslas would be sold with a no-questions-asked return policy—as long as cars were returned within seven days and with fewer than 1,000 miles on them. That would make test drives unnecessary for many customers, Tesla said.
Now, about two weeks later, Tesla says that it won’t close many retail locations after all but that customers will still have to order online. Test drives will be easier to arrange, the company says.
In response to our questions, Tesla said it never intended to end all test drives. It always planned to keep some stores in high-traffic locations open, and customers there would be able to take test drives.
The overall point of online sales is to reach customers in states where Tesla hasn’t been able to sell effectively because of franchise laws, Musk said Feb. 28. Ultimately, selling online directly to consumers would be one of Tesla’s long-term competitive advantages, something that “only a startup could replicate,” he said.
“This substantially opens up our ability to sell the car,” Musk said then. “It’s 2019. People just want to buy things online.”
It will still be more difficult to buy a Tesla than it is to buy a car from a traditional automaker, says Consumer Reports auto industry analyst Mel Yu. Many tasks that would be handled all at once in-house at traditional dealerships are handled separately by Tesla. With Tesla, owners can’t walk into a single place and get their trade-in appraised, consider financing options, or get help with titling and registration, Yu says. Instead, each part of the process has to be handled online or through the mail.
Even picking up a vehicle can be tricky, Yu says. You might have to travel to a neighboring state to get around franchise laws that ban Tesla from selling directly to consumers.
How Does the Model 3 Compare With Other EVs?
The $35,000 Model 3 was an important Tesla corporate goal from the beginning of the company, Musk said Feb. 28. The base model will sell at a price that’s well within the reach of average car-buying consumers.
For $35,000, consumers get a car with a 220-mile range and 0-to-60 mph acceleration in 5.6 seconds, Tesla says. In addition, there’s a $3,750 tax credit if the car is purchased before the end of June, and costs of ownership are lower than those of a gasoline-powered car. But Autopilot will cost an additional $3,000, and Full Self-Driving capability costs $5,000 beyond that.
Musk predicted that a Standard Range Plus version of the car, at a starting price of $37,000, would be more popular. Buyers of that version will get a 240-mile range and 0-to-60 mph acceleration in 5.3 seconds. By comparison, a Nissan Leaf goes 0 to 60 mph in 8 seconds and it takes the Chevy Bolt 6.8 seconds.
Tesla’s appeal is more-advanced technology, a full glass roof, much faster acceleration, and sleeker and more upscale styling, compared with the Leaf or the Bolt, says Ed Kim, an analyst with Auto Pacific. But the Nissan and GM still come with the full $7,500 federal tax credit, and their reliability is better established. And the two automakers’ dealer networks make repairs easier to handle, Kim says.
The federal tax credit works this way: Once an automaker has sold 200,000 EVs, its federal tax credit drops from $7,500 to $3,750 for six months, then to $1,875 for six months, and then goes away entirely. Tesla’s tax credit dropped to $3,750 on Jan. 1, will drop to $1,875 on July 1 of this year, and will go away entirely as of Jan. 1, 2020.
Many consumers like to lease rather than buy EVs because they get the benefits of the federal tax credit up front and don’t have to absorb a big hit in depreciation, Kim says. EV technology is changing rapidly, making holding on to a model more than a few years less attractive. An EV buyer three years ago might have been satisfied with a range of 100 miles, whereas today’s new EV entries get well over 200 miles. But Tesla doesn’t offer leases on the Model 3.
“The Model 3 is a purchase-only proposition, so the payments will be much, much higher compared to a lease on a comparably priced EV from a legacy automaker,” Kim says. “The purchaser may also deal with poorer resale compared to a comparably priced gasoline-powered sedan.”
More from Consumer Reports:
Top pick tires for 2016
Best used cars for $25,000 and less
7 best mattresses for couples
- The Model S sedan was unveiled in March 2009, with Tesla promising delivery in the third quarter of 2011. The first Model S was sold in June 2012, and major sales didn’t begin until November 2012—a year after target.
- The Model X SUV was unveiled in February 2012 with a promised delivery date of 2013. The first production model shipped Sept. 30, 2015. Major delivery didn’t begin until three months later, in December—almost four years after the car’s introduction and two years after the promised date.
- Tesla kept its schedule with the Model 3 sedan. Tesla introduced the lower-priced sedan in March 2016, with a promise to begin deliveries in 2017. The first sale was July 28, 2017, but that was primarily to Tesla workers and family members. Sales on a large scale began in November of that year.
Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2019, Consumer Reports, Inc.