Tesla shares went down by 4 percent on Monday. This is after Goldman Sachs downgraded the company's stock over concerns related to the upcoming Model 3 electric vehicle.
Tesla shares down by 4 percent due to Model 3 concerns. The company was initially down on Monday morning at US$244.86 a share. It closed at US$246.23 having gone down by US$10.77 per share. The electric car manufacturer's stock is down 11 percent from US$280 back on February 13.
The decline happened following Goldman Sachs' rating of the company as "sell" from a "neutral". The rating was given by Goldman Sachs analyst David Tamberrino who lowered the price target from US$190 to US$185.
Tamberrino's downgrade was influenced by potential issues related to the upcoming launch of the Model 3 which is the company's first mass-produced electric vehicle. The company currently only sells the Model S and Model X luxury vehicles.
The downgrade stems from Tamberrino's analysis of a possible delay in the Model 3's launch. The analysis also includes the possible financial strain from the acquisition of SolarCity by electric car manufacturer.
The stated that the company's shares will experience pressure as the year progresses due to possible additional investments for the Model 3 and a low demand of it. He added that "the acquisition of SolarCity - which is undergoing its own business model transition - comes at a time when we believe Tesla should be singularly focused on becoming a mass automobile manufacturer."
CEO Elon Musk is known for his wide-ranging goals which include making solar power as successfully as the company's electric vehicles. Despite some production and financial setbacks, Musk has insisted that the production of the Model 3 is right on schedule and that the company will be able to launch the electric vehicle on schedule, too, which will be later this year.