Today: Consumer Reports, which gave the Tesla Model S its highest score ever, points out some flaws that developed over time, adding to concerns about the electric car's drivetrain. Also: Twitter challenges Facebook with video ads.
The Lead: Reviewers note long-term issues with Tesla's Model S
The Tesla Model S was the most well-reviewed car of 2013, receiving the highest score in Consumer Reports history, but the electric automobile is now being dinged by reviewers for its inability to withstand long-term use.
Consumer Reports published a blog post Tuesday morning that highlighted issues with the first electric car fully designed and manufactured by Tesla Motors, following drivetrain issues that plagued sedans tested by Edmunds and Motor Trend.
"Over the last 15,743 miles, our test car has developed many minor problems that merit some reflection," Consumer Reports' Gabe Shenhar wrote.
Problems included the car's retracting door handles failing to emerge; the center screen, which is the main entry point for most of the car's functions, going completely blank; the front trunk failing to open; and an adapter for non-Tesla charging stations falling apart. The blog noted that all these issues were covered under Tesla's warranty program, and called it "cool" that the company sends a trailer for the car to take it in for service and delivers it back when done, offering a loaner car in the interim period.
Consumer Reports' blog follows issues reported with the Model S drivetrain system, which includes the engine and gears. Edmunds, which purchased a Model S in February 2013 to test, had its drivetrain system replaced three times in the first 30,000 miles the car was driven, and Motor Trend -- which gave the Model S its Car of the Year award in 2013 -- had its drivetrain system replaced as well.
"(The Model S) is an impressive technological achievement, but Tesla needs to iron out its quality problems," Edmunds reviewer Ronald Montoya wrote in summing up his organization's experience with the car, which it sold in July.
Tesla CEO Elon Musk addressed concerns in a conference call last week, explaining that issues with the drivetrain and other parts popped up in early units, "but the vast majority have been addressed in cars that are being produced today."
In a statement Tuesday, Tesla played up its warranty and ability to correct many issues with an owner's Model S through software updates that arrive without needing to bring the car in for service.
"Tesla considers service a top priority, and we err on the side of being proactive to ensure the best driving experience possible," Tesla spokeswoman Liz Jarvis-Shean said in an email. "That means we are particularly attentive in addressing potential issues, even if those issues appear to be very minor or have a low likelihood of causing any future problems."
Consumer Reports blogger Shenhar noted that the Model S scored an "Average" rating for reliability in his organization's annual survey of customers, and explained that experiences with the vehicles supplied to the company are not factored into that ranking.
"Given the number of bits and pieces Tesla has replaced on our car, it might be tempting to guess that its reliability score will go down," Shenhar wrote in Tuesday's blog post. "The reality is, it might -- depending on the frequency and severity of problems reported by our subscribers and whether they show that reliability is below average."
Tesla has already weathered investigations into car fires caused by road debris striking the car's undercarriage, and fresh concerns about Model S reliability couldn't slow down its momentum on Wall Street. The Palo Alto company scored a record high closing price for the second consecutive day, increasing 0.3 percent to $259.96.
SV150 market report: Twitter gains while plotting video ads
Wall Street suffered small declines Tuesday, but Twitter bucked that trend after announcing a new effort meant to challenge Facebook for social advertising.
Twitter announced in a blog post that it is testing video advertisements, allowing companies to promote advertisements that will show up directly in users' streams. Facebook began placing such ads on its platform late last year, and the big-money campaigns have helped the Menlo Park social-networking firm's revenues continue an astronomical rise. Twitter hopes for a similar sales boost, though it will not allow videos to play automatically when they appear on a user's screen, as Facebook does, instead choosing to charge the advertiser only when a user chooses to play the video. Twitter stock gained 1. 3 percent to $43.81 and Facebook declined 0.8 percent to $72.83 as analysts cheered Twitter's move "Video is a big deal for Twitter," Gartner analyst Brian Blau told Bloomberg News. "Video was the biggest thing missing from their product. Facebook is very far ahead with video."
Apple fell 2 cents to $95.97 after releasing its workforce diversity data, joining other Silicon Valley tech companies such as Google and Yahoo; The Cupertino company is reportedly in talks with some of the largest health care providers in the United States about use of its HealthKit system for tracking and recording biometric data. Electronic Arts began rolling out its subscription service in more countries than observers expected, and the Redwood City video game publisher's shares advanced 1.4 percent to $35.55. Intel gained 0.3 percent to $33.13 while analysts debated its chances with mobile chips, and Nvidia showed off its own advances in mobile processors and stayed even at $18.90. Yahoo dropped 0.8 percent to $35.52 while pulling off another acquisition, and Google declined 0.9 percent to $572.12 while opening up an educational offering to all teachers.
Up: EA, Twitter, Zynga, Gilead, Intel, Intuit, Tesla, LinkedIn
Down: Salesforce, SolarCity, Pandora, SunPower, AMD, Workday, VMware, Netflix, SanDisk
The SV150 index of Silicon Valley's largest tech companies: Down 4.51, or 0.29 percent, to 1,542.14
The tech-heavy Nasdaq composite index: Down 12.08, or 0.27 percent, to 4,389.25
The blue chip Dow Jones industrial average: Down 9.44, or 0.06 percent, to 16,560.54
And the widely watched Standard & Poor's 500 index: Down 3.17, or 0.16 percent, to 1,933.75