Tesla may “go bust” whereas its inventory may fall to $14, Per Lekander, a hedge fund supervisor who has been shorting Elon Musk’s electrical automobile maker since 2020, instructed CNBC on Wednesday.

His feedback come after Tesla reported 386,810 car deliveries within the first quarter of the 12 months, considerably under even the bottom market estimates.

“This was actually the start of the tip of the Tesla bubble, which most likely, arguably was the largest inventory market bubble in fashionable historical past,” Lekander, managing accomplice at funding administration agency Clear Vitality Transition, mentioned on “Squawk Field Europe.”

“I really assume the corporate may go bust.”

Tesla was not instantly obtainable for remark when contacted by CNBC.

Lekander was a former portfolio supervisor at funding agency Lansdowne Companions who efficiently referred to as a 2018 rally in carbon costs. Since 2020, Clear Vitality Transition has been brief Tesla’s inventory, which means Lekander’s agency will revenue if the automaker’s shares fall.

In a March 2021 interview with CNBC, Lekander referred to as for Tesla’s inventory to go down. On the time of the interview, Tesla’s shares closed at $233.94. On Tuesday, the inventory closed at $166.63. However Lekander additionally referred to as for a comeback of the standard automakers, singling out Volkswagen. Shares of Volkswagen have fallen round 53% since that decision, although they rallied in the beginning of this 12 months.

Lekander has taken his bearish Tesla name additional, suggesting the inventory may fall to $14 per share. He mentioned his name is predicated on an estimate that the corporate’s full-year earnings per share this 12 months can be $1.40. Lekander contends that Tesla is a “no development” inventory and ought to be valued on 10 instances ahead earnings, versus round 58 instances ahead earnings at the moment. Ahead earnings are an vital metric utilized by merchants to gauge the worth of a inventory.

If Tesla’s inventory hit $14, that might characterize round 91% draw back from Tuesday’s shut. Tesla’s shares have already fallen greater than 30% this 12 months.

“I believe nevertheless Tesla can’t be at $14. If it falls beneath a sure degree due to all the things that is been occurring, it should go bust.”

Lekander gave quite a few causes for his damaging outlook. He mentioned Tesla’s enterprise mannequin has been based mostly on robust income development, vertical integration and direct-to-consumer gross sales. Vertical integration broadly refers to when one firm internally handles many elements of a course of from the manufacturing of the automobile to the software program. This mannequin is “sensible” when an organization grows, however goes in “reverse” when gross sales fall, Lekander mentioned.

The hedge fund boss mentioned Tesla’s first-quarter issues had been to not do with a few of the causes the corporate cited comparable to provide chain disruption. As an alternative, it’s a “demand downside,” in keeping with Lekander, who mentioned two vehicles — the Mannequin 3 and Mannequin Y — make up the majority of the U.S. automaker’s gross sales. And the corporate doesn’t see one other new car being launched till 2025.

“I do not see any cause in any respect to see any restoration over the following two years provided that these fashions are stale and given the economic system just isn’t rocketing,” Lekander mentioned.

Tesla mentioned in its assertion Tuesday it had confronted quite a few challenges in the course of the quarter.

Lekander is amongst a refrain of damaging voices on Tesla after disappointing supply numbers.

“Whereas the long-term proposition {of electrical} autos stays unchanged, the realities of delivering on that proposition are actually beginning to inform as Tesla (and the others) have run out of well-heeled shoppers prepared to pay massive cash to be beta testers,” Richard Windsor, founding father of Radio Free Cell, mentioned in a analysis observe Wednesday.

Windsor questioned Tesla’s roughly $500 billion valuation calling it “ludicrous” at a time when the corporate is going through rising competitors.

“There’s nonetheless loads of draw back in Tesla’s shares,” Windsor mentioned.

Dan Ives, a famous Tesla bull at Wedbush Securities, who has a $300 value goal on the electrical car maker, has turn out to be involved.

“Let’s name this as it’s: Whereas we had been anticipating a foul 1Q, this was an unmitigated catastrophe 1Q that’s exhausting to clarify away. We view this as a seminal second within the Tesla story for Musk to both flip this round and reverse the black eye 1Q efficiency,” Ives mentioned in a observe Tuesday.

“In any other case, some darker days may clearly be forward that would disrupt the long-term Tesla narrative,” he added.

Analysts at HSBC and TD Cowen reduce their value targets on Tesla’s inventory on Wednesday.

Tesla is arguably one of the vital divisive shares on Wall Avenue and there are a lot of which are nonetheless bullish on the corporate.

Cathie Wooden’s Ark Make investments purchased Tesla inventory for a few of its funds this week forward of the first-quarter supply numbers in an indication of help.

In the meantime, some analysts are speaking up the longer-term potential of Tesla.

Tom Narayan, analyst at RBC Capital Markets, instructed CNBC’s “Squawk Field Asia” on Wednesday that a lot of the causes behind the autumn in first-quarter deliveries had been “one-time in nature.”

However he mentioned one near-term catalyst might be a latest directive from Tesla’s CEO to staff to put in and present prospects use the most recent model of the corporate’s driver help system, marketed as FSD or Full Self-Driving. Tesla additionally launched a free trial of the service for appropriate vehicles which often prices $199 per thirty days.

“Possibly that will get individuals within the showrooms, perhaps it will get individuals to subscribe to it, perhaps it will get individuals to purchase vehicles. So there may be that near-term catalyst,” Narayan mentioned.

The RBC analyst, who has an outperform ranking on Tesla’s inventory with a $298 value goal, mentioned his valuation is predicated on Tesla’s power storage enterprise, which is a “large alternative” for the corporate. And he added that “autonomy” can be an enormous a part of his ranking on Tesla.

“If FSD works, now it is [Tesla] a software program enterprise with a software program multiples,” Narayan mentioned. Tesla’s FSD system doesn’t make a automobile autonomous. It nonetheless requires a driver to take management of the automobile.