Tesla sinks after getting downgraded by Goldman Sachs

Seth Archer

Jul 5, 2017, 20:14 IST

Tesla is sinking on Wednesday after Goldman Sachs downgraded the stock based on what it thinks is plateauing demand.

The drop of 5%, or $17.84 a share, is the biggest drop by dollar amount this year. Shares had been on a tear, up 55.59% in 2017, leading up to the release of Tesla's Model 3.

Goldman has been bearish on Tesla in the past. The firm had a price target of $190, before lowering its target to $180 on Wednesday. The new target is 46% lower than Tesla's current price of $334.64.

Deliveries are one of the most important metrics for Tesla, and the company fell short of Wall Street estimates in the second quarter. It is set to start delivering its Model 3 sedan, targeted at mass-market consumers, later this month. The company hopes its new Gigafactory will help with the production of the new vehicles and plans to be producing 20,000 a month by the end of the year.