NEW YORK (TheStreet) -- Tesla Motors (TSLA) - Get Report stock is falling by 1.45% to $226.93 in late-morning trading on Tuesday, after UBS analysts cautioned that the electric vehicle manufacturer's upcoming Model 3 launch, on Thursday, could be a negative catalyst.
The Model 3 will be contending with high expectations and growing competition, the firm wrote in a note, Barron's reports. Even if the launch goes well, the new model could weigh on sales of the currently available, more expensive Model S.
Additionally, Model 3 costs remain roughly $7,000 higher than an equivalent internal combustion engine (ICE) vehicle, and the 10-year cost of ownership is about $21,000 more than the equivalent ICE vehicle, UBS noted.
Shares of Tesla dropped by 14% one month following the reveal of its Model X, the firm added, according to Barron's.
UBS maintained its "sell" rating on shares, given headwinds regarding the long-term profitability of the Model 3, Tesla's storage business and the ultimate need to raise cash.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.
Tesla Motors's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and feeble growth in its earnings per share.
You can view the full analysis from the report here: TSLA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.