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Auto Experts Peel The Onion On Consumer Reports' Tesla Issues

Auto Experts Peel The Onion On Consumer Reports' Tesla Issues
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Shares of Tesla Motors Inc (NASDAQ: TSLA) were down more than 10 percent on Tuesday after Consumer Reports highlighted long-term quality issues.

Kelley Blue Book senior analyst Karl Brauer told Benzinga he is "surprised it took them this long to note these issues."

When asked about KBB potentially changing its Tesla rating, Brauer stated the firm will likely investigate the issues brought up by Consumer Reports and that "it will be interesting to see if the die-hard passion will start to wear out."

KBB collects data by surveying its user base. According to Brauer, consumers are becoming more willing to mark down the vehicle.

Regarding a potential rating change, he stated, "It's tough for us to make too much of a change because there are so few vehicles out there."

When asked about if the Consumer Reports publication note will impact sales, Brauer said the small group of people who do not have a strong opinion on the cars "could be influenced."

Related Link: Tesla Shares Crashing After Consumer Reports Pulls Model S Recommendation

Bob Sorokanich, Online Editor of Road & Track approached the Consumer Reports publication from a different angle.

"I trust Consumer Reports implicitly," Sorokanich told Benzinga when commenting on accuracy of the claims.

When asked if the quality concerns matter, Sorokanich replied, "It's hard to say... People have high expectations, but people who have Teslas likely have other cars." Sorokanich thinks the problems Consumer Reports cited will be an issue when Tesla begins selling a lower price point car to a broader audience.

Sorokanich also noted that the same Consumer Report release said current Tesla owners are very likely to recommend the car.

"I think Tesla will improve as they get bigger," Sorokanich said, when asked if he thinks Tesla will work out these quality issues.

Latest Ratings for TSLA

Oct 2016Goldman SachsMaintainsNeutral
Oct 2016Goldman SachsDowngradesBuyNeutral
Sep 2016Cowen & Co.Initiates Coverage onUnderperform

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

Posted-In: Bob SorokanichAnalyst Color Long Ideas Top Stories Exclusives Analyst Ratings Movers Trading Ideas Best of Benzinga


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