Skeptical Of Model 3, Goldman Now Sees 50% Downside For Tesla

Goldman Sachs analyst David Tamberrino remains extremely bearish on Tesla Inc TSLA, as he sees depleting margins and Model 3 production rates falling below the company's estimates.

This caused him to reiterate his Sell rating and lower his price target from $190 to $180, representing almost 50-percent downside.

“With July being the soft launch date for the Model 3 relative to our previously forecasted September launch date, we bring forward our Model 3 production curve by two months — but still remain well below the company’s target production rates. Altogether, this drives a lower vehicle mix profile for Tesla and thus lower margins,” Tamberrino said.

Demand For Tesla Products Appears To Be Slowing Down

Tamberrino also highlighted how demand for Tesla’s established products appears to be plateauing (100,000 annual run rate).

"2Q17 deliveries of approx. 22k were below our 23.5k estimate and StreetAccount consensus of 24.2k, with the miss versus our estimates being driven by 12k Model S deliveries coming in lower than our 13.5k estimate. However, the cumulative 47k deliveries in 1H17 did register at the lower end of the company’s guidance. That said, we believe that the Model S and Model X are showing plateauing demand –in the range of approx. 24k per quarter, and 2H17 Model S and Model X delivery guidance helps confirm this."

Goldman’s report sent Tesla shares falling over 4 percent during Wednesday’s trading session. At time of publication, shares of Tesla were down 4.95 percent at $335.15.

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Tesla Outlines The Main Issue Affecting Q2 Deliveries _______ Image Credit: http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons