Analyst Completely Unimpressed With Tesla Inc (TSLA) Model 3 Demo

The Tesla Inc (NASDAQ:TSLA) Model 3 is arguably the most hyped car in Wall Street history, but its actual fit and finish doesn’t live up to people’s lofty expectations.

That’s according to Bernstein analyst Toni Sacconaghi, who came away unimpressed after a recent test drive. CNBC has more details on the negative view:

“We had the opportunity to see and test drive the Model 3 at Tesla’s showroom in Red Hook Brooklyn, NY … Fit and finish on the two demo cars we saw – perhaps not surprisingly – was relatively poor,” Bernstein analyst Toni Sacconaghi wrote in a note to clients Friday.
“While we doubt that it would impact (or even be noticed by) most prospective buyers, we do worry that poor overall initial quality could undermine Tesla’s brand and potentially overwhelm its service network.”

Sacconaghi found shortcomings with the car’s glass roof, body panel gaps, misaligned seams on the interior ceiling of the car, and rubber trim issues around windows. Tesla acknowledged the flaws but said the Model 3 was much further along at this point than the Model S or Model X were.

Accordingly, the firm reiterated its market perform rating and $265 price target on Tesla shares. That target suggests a 12.5% downside to current levels.

Tesla Inc shares closed at $302.99 on Friday, unchanged on the day. Year-to-date, TSLA has gained 41.79%, versus a 17.11% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of B (Buy), and is ranked #6 of 24 stocks in the Auto & Vehicle Manufacturers category.

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