Tesla Inc (NASDAQ:TSLA): Poor Customer Care Could Cripple Model 3 Launch, Says Analyst

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Tesla Inc (NASDAQ:TSLA): Poor Customer Care Could Cripple Model 3 Launch, Says Analyst

Bernstein Research analyst Toni Sacconaghi is urging investors to closely monitor the quality of customer service experience offered by Tesla Inc (NASDAQ:TSLA). The star analyst, who also is a customer of Tesla, isn’t happy with the electric car maker’s customer care.

According to Sacconaghi, Tesla must fix its customer service ahead of the upcoming launch of the Model 3. He believes that the automaker has problems with its pre-sales and after-sales assistance service. He described his own experience of buying a Tesla Model X last year as “not good.”

The process of buying a car from Tesla and getting it repaired is very frustrating for customers, according to Sacconaghi. It took him two years to get the Model X and that experience was “not good,” Sacconaghi said in a research note obtained by Fortune. The note was sent to investors on Friday.

Sacconaghi believes that a bad customer care could be a bigger problem as the automaker prepares to deliver the new Model 3.

The Model 3 is set to be released later this year. The electric sedan has been touted by Tesla CEO Elon Musk as a smaller, less expensive version of the Model S. It will be offered at $35,000, compared to $68,000 for the Model S.

According to Sacconaghi, if Tesla Inc (NASDAQ:TSLA) gets a record number of orders for its affordable Model 3, “current service problems could worsen.”

“We believe that any shortfalls in Tesla’s customer experience for Model 3 could have a significant impact on its powerful brand, potentially resulting in order cancellations and undermining its high customer satisfaction,” he said in the note. “We encourage investors to monitor these issues closely.”

Meanwhile, shares of Tesla Inc (NASDAQ:TSLA) closed down 0.71% on Friday. However, the stock has been performing well so far this year, gaining over 45% year-to-date.