Toyota convinced the auto industry quality is a must-have. Here’s how Elon Musk proved them wrong.

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  • Car companies with poor quality and reliability have had trouble breaking into the US market.
  • Tesla has been an exception to that rule.
  • The EV-maker has covered its flaws with state-of-the-art technology and strong branding.

Over the past 50 years, automakers had little hope of entering the US market if they could not master the basics of manufacturing. When they took market share from GM, Ford and Chrysler in the 1970s, Toyota and Honda built a reputation on cars that were more reliable than American cars. Bob Lutz, a former GM, Ford and Chrysler executive, told Businesshala that Detroit was forced to reevaluate how it built cars. “We established Toyota’s all-in-one production system method,” he said.

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Meanwhile, foreign brands struggling with quality and reliability such as Yugo, Renault and Sterling struggle to gain a foothold in the US, Dave Sargent, who oversees JD Power’s vehicle quality research, told Businesshala. Hyundai’s change in america That came only after it began offering a 100,000-mile warranty, a sign that it had fixed its quality issues.

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But Tesla, the latest automaker to have continued success in the US, has bucked the trend by proving that poor quality and reliability don’t necessarily scare away customers. The electric-car maker has long rejected many of the ideas behind Toyota’s production philosophy, sometimes relying heavily on automation or rushing through oversight to boost production. Over the years, Tesla has outperformed its rivals in quality and reliability surveys from J.D. Power and Consumer Reports.

Yet Tesla has consistently grown sales, while earning industry-leading owner-satisfaction scores. Since 2016, the company has Top most Consumer Reports’ ranking of the automotive brands with the happiest customers. Ed Kim, AutoPacific’s vice president of industry analysis, said while other automakers have found success with poorly built models, Tesla hasn’t done so consistently.

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Tesla transcends the auto industry’s conventional wisdom that quality is king with cutting-edge technology and inspiring intense loyalty. The company pioneered features like wireless updates, larger screens that control multiple settings, and Autopilot, a driver-assistance system that can navigate city streets (with mixed results according to YouTube videos and professional examiner)

customers have praised those features, as well as more traditional measures of driving performance, such as acceleration and handling.

Tesla also has strong intangible assets, such as the enthusiasm generated by its bold and controversial CEO. Elon Musk has said he cares more promoting clean energy From Maximizing Tesla’s Profits. And so for some customers, Tesla is more than a car. This is an opportunity to promote technological advancement and a healthier planet. “It’s like what Elon says: If you’re buying a gasoline car in this day and age, it’s like buying a horse when the car is available,” a Tesla customer told Businesshala in 2019.

The question is whether Tesla can live up to that sentiment in the long run. Consumers may not adapt to Tesla’s flaws as a wider variety of EVs become available in the coming years, Kim and Sargent said, but similar predictions made proved wrong before this. Electric models from competitors such as Audi, Jaguar and Chevrolet haven’t stopped Tesla’s growth.

And Tesla’s customers may have fewer problems to deal with going forward. While Tesla fared poorly in J.D. Power’s most recent dependency studyIt has made significant improvements to build quality in recent years, Sandy Munro, whose consulting firm has disassembled and tested several Tesla vehicles, told Businesshala. Should this trend continue, it doesn’t matter whether the company can retain Musk and continue to grow in automotive technology.

Are you a current or former Tesla employee? Do you have a news tip or opinion you’d like to share? Contact this reporter at [email protected], Signal at 646-768-4712, or via his encrypted email address [email protected]

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