NEW YORK (TheStreet) -- Tesla Motors (TSLA - Get Report) stock is retreating 4.35% to $188.37 in late morning trading on Tuesday after Pacific Crest analysts said demand for the automaker's electric vehicles may be declining.

Channel checks show that orders of the SUV Model X in the U.S. are falling behind expectations, while the Model S sedan "may be approaching its run-rate ceiling," Pacific Crest analysts wrote in a note this morning.

The firm lowered its 2016 earnings estimates to 27 cents per share from 76 cents per share on the "sector weight"-rated company, compared with the consensus of $1.63 per share. 

The 20% off promotion on the Model S and slower production of the Model X have not boosted sedan sales as expected, analysts noted.

Tesla could see a turnaround if the Model 3, the company's more affordable vehicle, is a success after it is launched on March 29.

"The beginnings of potentially lagging demand, combined with likely persistent production challenges, keep us avoiding TSLA," analysts added. "If we get further evidence of a lack of demand, the stock could see a significant downward re-rating, which reinforces our caution at the moment."

Separately, Tesla Motors has a "sell" rating and a letter grade of D+ at TheStreet Ratings because of the company's weaknesses, which include deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and disappointing stock performance.

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 articles's author. 

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