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Tesla Must Fix its Customer Service Problems, Says Star Analyst

Barb Darrow
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Barb Darrow
Barb Darrow
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Barb Darrow
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Barb Darrow
Barb Darrow
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May 19, 2017, 3:06 PM ET
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Tesla, the car company of choice for the nation’s tech elite, has a lot of work to do to improve its customer service, according to Bernstein Research analyst Toni Sacconaghi.

In a note to investors on Friday, Sacconaghi relates his own less-than-stellar experience buying a Tesla (TSLA) Model X. He said it was hard to get information even about his cars delivery date and noted an overall lack of hand holding that is perhaps inherent to Tesla’s direct sales approach. Other car makers field networks of dealerships and service facilities to deal with customers from pre-sales inquiries to service calls, to re-sale.

Overall, his buying experience, which took two years from deposit to taking getting the car, was “not good,” especially compared to what he’s seen from other luxury car makers like BMW and Mercedes. Tesla service centers are relatively scarce. The Tesla web site lists 68 service centers in the U.S. now, with five more “coming soon.”

Related: An analyst’s view of Tesla

A Tesla owner living Silicon Valley is probably fine—nine of those 68 service centers are clustered around San Francisco. But if you’re in upstate New York, you’ll need to schlep to Brooklyn, Syosset, Long Island, Westchester County, or Paramus, N.J. That could be a very long trip. And if there is a major recall-worthy problem with a model, how fast can this limited number of outlets respond?

Fortune contacted Tesla for comment and will update this story as needed.

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Sacconaghi conceded that he is basing his note on an extremely limited sample size—himself. But considering the upcoming release of Tesla’s new Model 3, investors should keep an eye on these problems. The Model 3 sedan, is due later this year, has been touted by Tesla CEO Elon Musk as a smaller, less expensive version of the Model S. Pricing starts at $35,000 compared to $68,000 for the Model S.

Related: Here’s What Elon Musk Shared About the Tesla Model 3

If the lower price boosts sales as expected, current service problems could worsen, according to Sacconaghi.

Related: Why Tesla Could Become the Next Apple

Summing up, he wrote:

“We believe that any shortfalls in Tesla’s customer experience for Model 3 could have significant impact on its powerful brand, potentially resulting in order cancellations and undermining its high customer satisfaction.”

Sacconaghi, who started covering Tesla in March, is a respected tech analyst known for doing his homework and pulling no punches in his coverage of tech giants including Hewlett-Packard [fortune-stock symbol=”hpq”], IBM (IBM), and Apple (AAPL). He’s not one of the “great quarter, guys” analysts who lob softballs chief financial officers during earnings calls, which is why investors should pay attention to what he thinks about Tesla.

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