Bernstein worried about Tesla gross margins, service/customer experience
Bernstein analyst A.M. Sacconaghi, Jr. believers the traditional automotive market is being disrupted, and the source of it is one upstart player: Tesla. In part due to Tesla's catalyzing role, the analyst is bullish on adoption of electric vehicles, and believes EVs could be 40% of the auto market in 20 years. Sacconaghi, Jr. thinks Tesla has two structural advantages, namelly unparalleled consumer awareness, and a brand-reinforcing, direct-distribution model. While he is bullish on Tesla's long-term potential, he worries about gross margins, and its service and customer experience, which could be further pressured, particularly if Model 3 has quality issues. The analyst reiterates a Market Perform rating and $265 price target on the shares