The analyst said the automaker's second-quarter report confirmed his bearish view on the stock and termed it a "diaster."
The company had to cut prices to sell more cars, which led to lower margins, Hoffman said.
Margins were a disaster in the second quarter, and the company lost more money than investors expected, he said.
The analyst said the Model 3 is a poor quality vehicle near the bottom of Consumer Reports rankings — and has a design flaw that causes it to catch 15 pound of dust and dirt in the undercarriage.
While there is demand for Tesla's cars, it's at a price point at which Tesla loses money, Hoffman said. The analyst added that he's also concerned about the recent departures of executive directors.
Munster: I'm Still A Believer
Gene Munster of Loup Ventures said six months ago on CNBC that 2019 is would be a transitional year and said he's unsurprised by the ups and downs.
As long as Elon Musk is at the reins and the company continues to grow its vehicles, Munster said he will continue to be a believer in the company's story, speaking on CNBC Friday.
Investors should take lower margins in the context of how much cash the company has on hand, the analyst-turned-venture capitalist said.
Tesla Inc has $5 billion in cash, and if it comes below its 10-15% targets over the next six quarters, it is going to have enough cash for two years, Munster.
"The future is electrification," he said.
Tesla shares were down 0.34% at $228.04 at the close Friday.
Tesla Short Sellers Bank .5B On Earnings Miss
'Concerning Trend': Wall Street Weighs In On Tesla's Q2 Earnings
Photo courtesy of Tesla.
Latest Ratings for TSLA
View More Analyst Ratings for TSLA
View the Latest Analyst Ratings
See more from Benzinga
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.