Let’s put the rhetoric and posturing aside for a moment. There is a brand issue with Tesla that continues to create a serious problem.
Tesla continues to score poorly on J.D Power Initial Quality Surveys (IQS). The J.D. Power Initial Quality Survey assesses problems new owners experience within the first 90 days of owning their new vehicle. The J.D. Power Initial Quality Survey looks at problems per 100 new vehicles. The 2024 industry average is 194 problems per 100 vehicles. Tesla had 262 problems per 100 vehicles. Tesla does not allow J. D. Power to interview owners in many states, so J.D. Power does not technically, officially rank Tesla. However, Tesla is still below Land Rover vehicles, which is an unfortunate feat, as Land Rover vehicles have typically owned the last place ranking for some time. Land Rover has improved remarkably moving its way up in the rankings even though still below average. Dodge now has the worst ranking at 300 problems per 100 vehicles.
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In 2020, as a reference, the J.D. Power Initial Quality Survey industry average was 166 problems per 100 vehicles. Tesla had 250 problems per 100 vehicles.
On the other hand, J.D. Power runs a study titled APEAL that assesses customer-perceived performance, execution, and layout. Basically, this is a customer-perceived overall satisfaction—image ranking, using a 1000-point scale.
The 2025 APEAL average score for premium vehicles is 870. Seven vehicles – Porsche, Jaguar, Land Rover, BMW, Mercedes-Benz, Lincoln, Genesis – scored above average. Tesla scored at the average with 870. The J.D. Power summary indicated that Tesla lost out “… to EV launches from traditional automotive manufacturers when it comes to the owners’ level of emotional attachment and excitement with their new EV vehicle.”
In 2020, Tesla ranked highest on J.D. Power’s 2020 APEAL Study with a score of 896. This was an exceptional score. As with the Initial Quality survey, Tesla is not officially ranked. The industry average was 861. Porsche, the highest officially ranked 2020 vehicle, scored 881.
Tesla’s best score is in the J.D. Power TXI survey, which measures overall technology innovation. In the latest 2024 survey, Tesla ranked highest with a score of 286, an improvement from 2023. These data indicate that customers perceive Tesla as a leader in technology innovation and provide a good tech experience.
Here is the brand problem. Tesla is perceived to be a leader in technology. But when it comes to quality and satisfaction, the Tesla brand is challenged. Quality is a critical driving issue. A quality vehicle is safe to drive and should not have problems in its first 100 days. Customers are not satisfied with their Tesla vehicles relative to Tesla’s competition. But Tesla is innovative.
Please do not underestimate the power of customer-perceived innovation. Innovation generates leadership perceptions. Innovation is exciting. In a world where things change moment-to-moment, innovation means a brand is aware and acting on the awareness. Tesla’s focus on robotics and advanced driver assistance keeps owners and shareholders entranced. Even when AI-driving innovations are postponed, enthusiasm for Tesla’s ground-breaking promises still burns hot. As The Wall Street Journal points out, Tesla’s strategic shift to “cars that are responsible for driving decisions” is a goal that Tesla believers see as something Tesla will accomplish.
To be fair, the whole EV category still needs more quality control. J.D. Power reported that even though EV proponents state that EVs should be less problematic, requiring fewer repairs, this is not the case. Apparently, “… owners of battery EVs and plug-in hybrids (PHEVs) are experiencing problems that are of a severity level high enough for them to take their new vehicle into the dealership at a rate three times higher than that of gas-powered vehicle owners.” (The IQS included a new section on repair visits.)
Quality is a manufacturing issue. Quality is also a brand issue. If a brand begins to gain a perception that there are quality problems, then brand value is in trouble. Data show that there are correlations between quality and price. In the customer’s mind, a low-quality product or service is associated with a low price and vice versa. A high price correlates with high quality and vice versa. Continue to sell a product or service of sketchy quality and forget about selling at a high price. Again, Land Rover appears to have taken on this challenge.
Reuters reported that Tesla raised the prices of its Model S and Model X vehicles by $5,000. The Models X and S have only minor changes according to multiple new briefs. Reuters wrote, “… the all-wheel drive Model X is now $89,990 and its plaid variant is now $104,900. The Model S all-wheel drive vehicle is now $84,990 while its Plaid variant is $99,990. As research data points out, sales of these vehicles may rest upon customers opting for the experience and innovation leadership over quality and price.
Additionally, quality is essential for trust. Saying you deliver a high-quality product and then delivering a product with initial quality problems erodes trust. A brand needs trust for preference and loyalty. Loyal customers are valuable customers, and valuable customers help generate quality revenue growth.
Tesla’s paradox of inconsistent quality and good image is something that should be addressed.
In 2020, The Wall Street Journal called the two contradictory Tesla scores a paradox of the automotive industry. Paradoxical, yes, but the Tesa results are not that surprising. This paradox is actually related to well-studied customer attitudes. People still buy Tesla because data show that many people tend to allow experiential benefits to override perceived quality slip-ups.
One of the best explanations for why people will overlook quality issues while loving the brand experience is a 2008 study from the Journal of Business Research. The study focused on the relationship between brand quality and brand image. It considers what happens when quality and image are mismatched, that is, how can a brand with problematic quality have an excellent, compelling image?
The researchers identified some fascinating data. First, the study confirmed that low brand image is much more damaging than low brand quality. Second, pleasure-seeking brand attitudes (experiential benefits) are mostly driven by brand image. Utilitarian (functional) attitude changes are affected by brand quality. Third, non-feature-driven, more emotional, pleasure-seeking brand beliefs are stronger predictors of appeal and excitement when quality is low rather than high. Apparently, if the purchaser’s motivations are hedonic in nature, low quality is a less important driver. In other words, if the brand image is strong, it can overcome negative quality issues. For cars, the study showed that “strides in quality are not as powerful as efforts aimed to enhance brand image.” Fourth, brands with low perceived brand image are more vulnerable than brands with low perceived brand quality.
This does not mean that high-image brands, like Tesla, should ignore quality problems. What it does mean is that high-image brands, like Tesla, can recover from lapses in quality while still maintaining the adoration of their user group. Therefore, it is possible for Tesla to have initial quality problems and at the same time have strong, exciting, experiential benefits generating compelling appeal that translates to sales.
On the other hand, J.D. Power is relative. Tesla is seen relative to other automotive brands in the quality and satisfaction surveys. Continuing to rank lower than competitive brands, especially in a souring economy, can create a negative brand image. “What? My Tesla ranks lower than Kia, Ford, and Jeep on quality?” “What? My Tesla is only average on customer satisfaction?”
A brand may have a fabulous image, which also reflects on the image of the user or owner. My car is a leader, and so am I. My car is innovative, and I am cutting edge.
The dichotomy between quality and image is not new to automotive. In its heyday, Jaguar’s gorgeous cars were also plagued with quality issues. Yet, many Jaguar owners were fiercely loyal to the brand. These Jaguar owners continued to purchase XKEs, even when their vehicles spent more time in service bays than in their own garages. It is the same with Land Rover vehicles. For years, Land Rover ranked last in J.D. Power Initial Quality studies, and yet the vehicles remain a highly evocative and experiential car brand family. Land Rover has moved up the rankings of both the IQS and the APEAL surveys since its hugging the bottom of the ranking ladder.
These J.D. Power data seem to show that because Tesla customers are emotionally and experientially invested in the brand, they can overlook the aggravation of problems. This does not mean that Tesla should ignore the initial problems of its vehicles. But, it does explain why Tesla brand believers report problematic quality and yet have a strong emotional attachment to the brand. Tesla’s brand believers might not perceive the brand’s quality quirks relative to image contradictions as troublesome enough to delay a purchase.
Recently, shareholders have been concerned about their Tesla investments. The business press indicates that the cause of the concern is Mr. Musk not spending enough time at the Tesla helm. However, as far back as 2020, Tesla has not been perceived as a quality vehicle per J.D. Power. This lack of quality due to vehicle problems has led to overall customer dissatisfaction. Having Mr. Musk spend more time at Tesla is not good enough. Shareholders and other stakeholders need to have management focus on quality and satisfaction. Technological innovation is great. Technological innovation has made vehicles better and safer. But, if the vehicle does not function and owners are disgruntled, the challenge is not having the CEO back in the business. The challenge is having the CEO back focused on the right issues. The viability and brand value of the Tesla brand are both at stake.
Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help clients worldwide, in all stages of development, define and articulate what makes them competitive at pivotal moments of change. This includes pricing strategies that propel their businesses and brands forward. Please email us to learn how we can help you compete differently.
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