J.D. Power ranks Tesla last, unofficially, among 32 brands in its 2020 Initial Quality Study. One might expect the "low quality" manufacturer, which just this year hit 1 million total vehicle sales, to be less valuable than mainstream carmakers such as General Motors, which sold nearly 8 million vehicles in 2019 alone.
In reality, Tesla's market capitalization far exceeds that of traditional automotive companies. How is Tesla, with its reputation for poor quality, among the most valuable companies in the world? The answer stems from how quality is measured and suggests quality metrics — and the organizations that embrace them — must evolve.
This was the first year Tesla was profiled in the study. Its last-place finish was unofficial because the automaker doesn't allow J.D. Power to survey owners in 15 states, which is a requirement for the study. But J.D. Power said it had a large enough sample from the other states to calculate Tesla's score.
J.D. Power's surveys have compelled automotive companies to improve quality and competitiveness since the 1987 Initial Quality Study first measured the number of "things gone wrong" per 100 vehicles 90 days after purchase. This metric made sense when TGW varied significantly among the Detroit 3 and Toyota, but today it has lost differentiating value, as TGW has evened out and as failures have shifted from noticeable (engine failure) to subtle (squeaks).