PhotoInvestment bank UBS has concluded that Tesla’s Model 3 sedan is riddled with quality issues, including inconsistent gaps and flushness throughout the car, missing bolts, loose tolerances, and uneven and misaligned spot welds.

Based on the results of its dissection, UBS concluded that Tesla would not be able to make any money from the $35,000 base trim of the electric sedan.

"The car scored 'below average' on the fit & finish quality audit which looked at >1, 500 gap measurements,” UBS analyst Colin Langan wrote in note to clients. “The team also found the body/wind noise was ‘borderline acceptable.’”

“The results confirm media reports of quality issues & are disappointing for a $49k car,” UBS said.

Contrasts earlier findings

The findings stand in stark contrast to a teardown of the vehicle performed in May by analyst Sandy Munro of Munro & Associates. At the time, Munro admitted that he was “eating some crow” after initially being skeptical of the vehicle due to its fit and finish.

The firm’s research and teardown of the Model 3 revealed over 30 percent profitability. UBS’ report claims that Tesla would be losing about $5,900 for every $35,000 Standard trim Model 3 it sells.

"Beyond the build quality issues, the serviceability of the Tesla Model 3 comes into question as well," said UBS. "Many aspects of the vehicle are inaccessible to even experienced mechanics and the containment of the battery pack makes fixes complex and expensive.”

"In general, the car has fewer components, which are often more advanced than previous generations, but each component is more complex, expensive, and harder to service or replace,” UBS said.

Tesla owners have reported problems

UBS’ findings are reflective of the experiences of at least a dozen Tesla owners. Customers who spoke to Business Insider reported experiencing problems before, during, and after receiving their vehicles. Problems included delayed deliveries, broken door handles, and internal computer systems crashing that allegedly left cars inoperable.

Although UBS has given Tesla a “Sell” rating, the firm also highlighted the "next-gen, military-grade tech" that puts the company years ahead of its electric competition from Chevrolet and BMW.

In independent surveys, Tesla’s vehicles have received high customer satisfaction scores.


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