Tesla Inc (TSLA) Model 3 May Be Most Polarizing Car Ever

Tesla Inc (NASDAQ:TSLA) either has a massive hit on its hands with its new Model 3 sedan, or a massive bust waiting to happen — depending on who you ask.

As Forbes reports, one Wall Street analyst recently sung the car’s praises in a note to clients:

“We believe there is a real passion for the brand. It is bigger than loyalty because much of the enthusiasm comes from people who have never owned a Tesla. The only comparable we see is the iPhone. Apple succeeded because the world shifted from PCs to smartphones and Apple had the best product. Similarly, we believe there is a secular shift today from internal combustion engines (ICEs) to electric vehicles and we think Tesla has the best product.
“We test drove the Model 3 sedan…We aren’t professional car reviewers, but we walked away believing that Tesla will be selling as many cars as it can produce for a long time…Importantly, the technology integration is a clear advantage. Model 3’s immersive central display experience is as close as we’ve seen to smartphone automobile integration.”

In stark contrast, Bernstein analyst Toni Sacconaghi had pretty much the exact opposite to say. The “fit and finish on the two demo cars we saw – perhaps not surprisingly – was relatively poor,” he noted, with several key details of the car lacking polish. Rubber seams, for example, were misaligned in the model he tested, and ceiling seams were off as well.

Other analysts have rightly criticized Tesla’s lack of production prowess with the Model 3. The company has continually missed its own modest production goals, only making a few hundred of the electric cars in Q3, versus goals in the thousands.

Clearly, Tesla has a polarizing product on its hands to match the polarizing nature of its stock. If the company can figure out how to make Model 3s in mass quantities over the next year or so, they should be fine. If they fail on that front, however, expect a lot more criticism — and share price downside — to follow.

Tesla Inc shares were trading at $306.47 per share on Monday morning, up $3.48 (+1.15%). Year-to-date, TSLA has gained 43.42%, versus a 17.00% 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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