Tesla Inc. Crushes Competition in Owner Satisfaction

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For a third year in a row, electric-car maker Tesla (NASDAQ: TSLA) topped Consumer Reports' owner satisfaction survey, besting brands like Subaru and Honda, and finishing well above Volkswagen-owned Porsche, which took second place.

Tesla's high owner satisfaction ratings reflect both the attractiveness of fully electric, long-range vehicles and Tesla's vertically integrated approach to vehicle design.

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Winning customers

Tesla earned a rating of 90 on the Consumer Reports survey -- slightly lower than its 91 rating last year -- while Porsche scored an 85. In third place, Hyundai's luxury Genesis marque earned a score of 81. Fiat Chrysler's Chrysler had the highest rating of any American brand other than Tesla, coming in fourth with a 78.

Consumer Reports says its owner satisfaction survey measures whether an owner says he or she would buy the same car again and whether the car lives up to expectations. The survey asks respondents to rate the vehicle in six categories, including driving experience, comfort, value, styling, audio, and climate systems. To qualify for the survey, respondents must have owned their vehicle for at least three years.

Growing respect for Tesla

Tesla's soaring sales, strong customer satisfaction ratings, improving reliability, and off-the-charts demand for its new Model 3 have made the automaker impossible to ignore. Indeed, the company has transformed itself from a niche player into a true competitor to the long-established automakers -- at least according to a top exec at the world's largest, Volkswagen.

"In the old world it is Toyota, Hyundai, and the French carmakers. In the new world it is Tesla," Volkswagen brand CEO Herbert Diess told Reuters when asked about who his company' main competitor is. "Tesla belongs among the competitors which has abilities that we currently do not have," Diess said. He went on to point out that about half of Tesla's engineers are software experts; at Volkswagen, it's a much smaller percentage.

Similarly, Porsche North America CEO Klaus Zellmer recently told CNBC that the automaker has "lots of respect for Tesla," noting that his company has lost some customers to Tesla due to the electric-car maker's better connectivity, features and technology. That's a significant change in tone compared to just over two years ago, when the former Porsche CEO Matthias Mueller, who is now the CEO of Volkswagen Group, said he was ignoring Tesla. "I cannot say anything about Tesla." He told The Wall Street Journal. "I don't know anything about Tesla."

Tesla's vertically integrated computers and software enable it to regularly release over-the-air software updates to its entire fleet of vehicles, adding features like Autopilot, faster acceleration, improved energy usage, sound system upgrades, and more. While other automakers are increasingly able to offer similar over-the-air upgrades, they're still well behind Tesla's software prowess.

Tesla's top rank for the third year in a row on Consumer Reports' owner satisfaction survey is another reminder why global automakers should be taking their electric-vehicle plans seriously -- and it's a good sign for the company's investors just as the automaker is significantly ramping up production of its lower-priced, high-volume Model 3.

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Daniel Sparks owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.