Based on survey results from 1.1 million subscribers, the Consumer Reports Annual Auto Issue ranked Tesla's Model S the top overall pick. The ratings factor in quality, reliability and consumer satisfaction.
Meanwhile, Ford slipped to its lowest ranking by Consumer Reports since CEO Alan Mulally took the reins at the automaker in September 2006.
"This shows Ford is in a troubling spot. It has to renew the faith of people in the brand," said Jeff Bartlett, deputy editor, autos, at Consumer Reports.
A score of 99 out of 100 made the Tesla Model S Consumer Reports' highest-rated model. It's also the best score a model has ever received from the magazine.
"Tesla is going up against established brands, and yet it is schooling them on how to make a high-tech car," Bartlett said. "It excels in all areas that we measure."
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The ranking is the latest accolade for the company, which is expanding its sales and production. Last week, Tesla said it expects to sell at least 35,000 Model S vehicles in 2014. This week, it's expected to announce plans to build a "giga factory," which will dramatically increase production of lithium-ion battery cells and battery packs.
Within the next few weeks, CEO Elon Musk will go to China to deliver the country's first Model S.
"Tesla has proven they can go from nothing to building a highly regarded car right out of the gate," Bartlett said. "One would think they can continue to improve."
The "Top Pick" selection comes just hours after Morgan Stanley raised its price target for the company's shares to $320 from $153, sending its shares higher. (What are Tesla shares doing now? Click here.)
It also comes amid the National Highway Traffic Safety Administration (NHTSA)'s investigation into the safety of the Model S battery system. There is no indication when that inquiry will be completed.
Ford quality slips
While Tesla is riding high, Ford's ranking has hit a new low since CEO Alan Mulally took over.
Its score of 50 is only slightly lower than last year's score but caused it to rank as the second-worst brand—a drop from 2013. The only automaker to perform slightly lower was Jeep, which Ford edged out by a few decimal points. (The scores were both rounded up to 50 in the rankings.)
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As has been the case in recent years, the biggest complaint from Ford owners was the reliability of their Ford Sync and MyFord Touch in-car connectivity systems.
"Sync and MyFord Touch have proved to be an Achilles' heel ... with the system locking up or being slow to respond," Bartlett said. "It is bringing Ford's overall reliability down."
The latest criticism further explains why the automaker has reportedly decided to drop Microsoft as the software provider for Ford Sync and MyFord Touch. Ford is expected to announce a new deal for BlackBerry to be the system's primary operating system.
Ford's poor performance is particularly noteworthy given the history Mulally has with Consumer Reports.
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When he became CEO, Ford's reputation was among the poorest in the industry, and Mulally was vocal about immediately correcting the problem. In an effort to lift the reliability of Ford vehicles, he and some of his top lieutenants met with the Consumer Reports' auto team to better understand why the company was falling short.
After that meeting, Ford started to climb the rankings and within three years was ranked among the best brands in the annual auto survey. Now, it finds itself dogged by issues with its tech features.
"We've seen this trend over the last few years," Bartlett said. "Some of these new Fords are quite nice, so these scores are disheartening. Ford needs to roll up its sleeves to make sure the new models live up to the brand's long-term reputation."
Japanese losing their lead?
Historically, Japanese auto brands have dominated the Consumer Reports issue by having the most "Top Pick" models.
This year, however, Japanese models are listed as the top pick in just five of the 10 categories. It's the fewest top picks for them in more than 40 years, but Bartlett said he's not surprised.
"Across-the-board quality continues to improve," he said. "We're seeing better products from Europe and around the world. Now with Tesla joining the ranks, it shows there is another American automaker in the mix."