Tesla (TSLA) Automotive Gross Margins Could be Overstated - Bernstein

Tesla (NASDAQ: TSLA) shares are on watch after Bernstein analyst Toni Sacconaghi looks at if the company's automotive margins are being overstated.

Sacconaghi said they struggle to find evidence as to why COGS of Services and Maintenance have increased exponentially, with no commensurate increase in revenue. While the company said the increase is due to a build-out in services infrastructure, they have a hard time corroborating this with their numbers.

Speculating on what is happening, the analsyt suggests COGs, historically booked in the Automotive Segment, are now being booked in the 'Services and Others'. If this is the case then TSLA's Automotive segment gross margins may be overstated.

"Our analysis indicates that if a majority of these new costs incurred by Services were instead allocated to Autos, that would suggest reported Autos gross margins may be overstated by ~150-300 bps," the analsyt added. "Importantly, we note that we are not questioning Tesla's overall reported gross margins but rather the reported split between Automotive vs. Services & Other."

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