Goldman Sachs Predicts Tesla Shares Will Start to Drop in Coming Months

Increased competition in the electric vehicle marketplace is coming for Tesla.

byBrian Evans| PUBLISHED Sep 5, 2018 7:14 PM
Goldman Sachs Predicts Tesla Shares Will Start to Drop in Coming Months

Goldman Sachs has come out with a sell rating for Tesla, which comes on the heels of the turmoil Tesla faced during the past several months. Tesla shares dropped 4.2 percent on Tuesday down to a close of $288.95. Analyst David Tamberrino estimated that in six months Tesla will be trading at $210 per share, a whopping 30 percent drop from last Friday's closing price, according to a CNBC report.

After a month long hiatus of Tesla coverage due to its position as a financial advisor to Tesla, Goldman Sachs has released new coverage of the all electric automaker. Goldman Sachs took on a role as a financial advisor during the brief stint where Elon Musk attempted to take Tesla private.

In a statement to clients, analyst David Tamberrino said, "We see the medium-to-longer term industry backdrop as challenging for Tesla's products; this follows from an increasing number of EV launches from both traditional OEMs and other start-up competitors — at a time when the company's product cadence hits a gap. We believe the company will see pressure to its lead in EVs as competition catches up."

Some of the competition for Tesla was revealed Tuesday with the Mercedes Benz EQC 400 breaking cover. Audi has yet to officially reveal the new e-tron, but it released that mass production of the model has started. 

With other electric options from Jaguar, BMW, and Porsche all coming to market within the next couple of years, the marketplace will only get more crowded. Unless Tesla can step up its game and fix quality control issues, such as mismatched door panels it will certainly lag behind the curve.