Tesla is J.D. Power's Top Car for Appeal After Finishing Last in Quality--Update
July 22 2020 - 1:24PM
Dow Jones News
By Tim Higgins
A month ago, Tesla Inc. scored the worst among other automotive
brands in an influential study that tracked the quality of new
cars. Now, a second part of the survey of those same customers
shows that despite problems, they think highly of the electric-car
brand for other, more emotional reasons.
The paradox is on display in the new Automotive Performance,
Execution and Layout Study by J.D. Power, which measures owners'
emotional attachment and excitement for their new vehicles. The
results underscore the challenges auto makers face balancing
attention to manufacturing quality while trying to capture a more
elusive factor: coolness.
It helps explain why Tesla's sales have soared in recent years
despite complaints about initial quality found in the J.D. Power
survey released in June and other places, including social media.
Buyers have recorded complaints about wind noise, ill-fitting body
panels and other gripes not typically associated with vehicles that
sold on average for $56,000 last year.
"The people love the car; they appear to be willing to accept
the issues that come along with it," Doug Betts, J.D. Power
automotive division president, said in an interview about the
differences between the two studies. "In the end, loyalty will be
something to look at, particularly if other companies start to
offer some of the same features and things that Tesla has -- will
they be lured away?"
Tesla didn't respond to a request for comment.
In past reports that have raised quality questions, Tesla has
pointed to its own data that it says show improvements. The company
also says it takes customer feedback seriously and uses it to
address issues.
Enthusiasm for Tesla has helped the Silicon Valley auto maker's
stock more than quadruple this year. Deliveries of Tesla vehicles,
including the Model 3 compact car that touts acceleration of zero
to 60 miles an hour in 3.2 seconds, rose 50% last year compared
with 2018.
Chief Executive Elon Musk had targeted more than 36% growth this
year before the coronavirus pandemic raised questions about those
plans. The company is scheduled to release second-quarter financial
results Wednesday after the market closes and has said it would
update its forecast for the year then.
In the survey measuring cars' appeal, Tesla scored 896 out 1,000
points, better than any other brand. The next highest score went to
Volkswagen AG's Porsche, with 881, which ranked as the top premium
brand, and Dodge, with 872, to stand atop the mass-market
ranking.
This is the first time Tesla has appeared in the appeal survey,
which relies on information gathered from car-registration data and
measures 37 attributes, from sense of comfort to level of
excitement.
Some states require the car maker's permission to use
registration data and Tesla hasn't granted it. This year, however,
Tesla's sales have grown so much in states where permission isn't
necessary that J.D. Power could include the company. Because the
researcher doesn't have data from all 50 states, however, it didn't
include the Tesla results in its official rankings. For that
reason, the car maker's No. 1 appeal score doesn't qualify it for
official ranking.
Tesla owners raved about the electric powertrain, Mr. Betts
said, as well as the touch screens and falcon-wing doors found on
the Model X sport-utility vehicle. Even though the doors have been
plagued with problems from the beginning, they have captured the
popular imagination on social media and in the broader culture,
such as being featured prominently in Jaden Smith's "Icon" music
video in 2017.
In June, J.D. Power's Initial Quality Study found that Tesla
vehicles had 250 problems per 100 vehicles compared with an
industry average this year of 166 problems. Dodge and Kia Motors
Corp.'s namesake brand tied for having the fewest problems. In the
appeal study, Kia came in sixth among mass-market brands with a
score of 844.
Other auto-industry observers have weighed in on the disconnect
found in the J.D. Power studies. Reilly Brennan, general partner of
Trucks Venture Capital, a seed-stage investing fund in the
transportation sector, discussed on Twitter this week how he had
made mistakes in valuing Tesla. "For years I believed their initial
build quality would kill them 'once the big [car companies] create
something similar,'" he wrote. "After 10 yrs there is still not a
similar product and quality probs have declined."
Longtime automotive executive Philippe Chain described in a blog
post last week his experience of going to work at Tesla in 2011 as
vice president of quality after years working at other auto makers.
He noted in particular gaps between Tesla vehicle body panels that
would never have flown elsewhere.
"What would have been deemed as unacceptable by any car makers
was seen as part of an ongoing process by Elon Musk who believed,
rightly so, that the user experience of driving a truly innovative
automobile would outweigh minor defects that will be eventually
corrected," Mr. Chain wrote.
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
July 22, 2020 13:09 ET (17:09 GMT)
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