Tesla’s Model 3 Deliveries Will Be Almost 70% Less Than Expected, Analyst Says

The year may not be wrapping up as hoped for Tesla Motors CEO Elon Musk.

An analyst from KeyBanc Capital Markets slashed his forecast for Tesla Tuesday, predicting weaker-than-expected sales for the Model 3 in the fourth quarter.

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Worries about Model 3 sales began to percolate in the third quarter. During that three month period, of the more than 26,150 total vehicles delivered, only 220 were Model 3 cars—below the 1,260 expected by analysts, according to CNBC. KeyBanc analyst Brad Erickson said in a note that Tesla’s failure to deliver the number of Tesla Model 3s expected for the year will be “likely acceptable for the buyside,” but that Tesla’s stock price could take a hit because the Model 3’s margin growth “will disappoint and investors will have to acknowledge no S/X growth at some point, which is not reflected in the shares.”

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Erickson said he spoke with sales representatives at a number of Tesla stores, who revealed that Model 3 deliveries would be lower than he had expected, CNBC reports. He therefore lowered his Model 3 delivery forecast from 15,000 to 5,000 vehicles for the fourth quarter.