Call of the week: Goldman warns Tesla could lose half its value

A warning by Goldman Sach that Tesla (TSLA) shares could lose nearly half their value is Yahoo Finance’s call of the week.

The big bank reiterated its sell rating on the electric carmaker while cutting its price target to $180, about 49% lower than the stock’s closing price on Monday. Here’s why: It’s concerned demand for the Model S and Model X is ‘plateauing in the 24k range per quarter’ after Tesla’s first-half deliveries came in at the low end of its own forecast. Goldman also questions its ability to meet lofty Model 3 production goals.

In a note to shareholders, analyst David Tamberrino wrote, “We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company’s production targets and as 2H17 margins likely disappoint.”

Goldman Sachs’ bearish call was just one of several reasons why Tesla’s stock sold off this week. Volvo’s announcement that it plans to shift to an all-electric lineup by 2019 raised concern about rising competition in the industry, and new crash test results questioned whether the Model S is really the safest car in history, as Tesla has claimed.

The string of negative news was enough to dethrone Tesla as the most valuable US automaker, a milestone it first achieved in April. It’s market value fell to about $48.32 billion, behind General Motors’ $52.46 billion valuation.

But despite the stock’s massive weekly decline, its biggest since February 2016, it’s still among this year’s top performers. The next big test for Tesla will be the Model 3, which is starting production today.