"We expect 3Q gross margins could come in below our estimate of 17.8% due primarily to the digestion of high start-up costs related to Model 3 production, lower pricing for Model X and weaker-than-expected volumes", said the analyst, adding that production woes should begin to improve in Q4.
Tesla Inc (TSLA.O) on Wednesday pushed back its target for volume production on its new Model 3 sedan by about three months, saying it was hard to predict how long it would take to fix all production bottlenecks.
Complications with Tesla's manufacturing processes have slowed production of the Model 3, a auto widely considered key to Tesla's future success.
Tesla said the main constraint it now faced was within its battery module assembly line, where the company had to redesign part of the production process.
Tesla was already facing backlash from its shareholders over production of the Model 3, which is the first vehicle that's priced more for the average consumer at $35,000. The problems could also worry the over 500,000 customers who have put down a refundable deposit on the vehicle.
Tesla reported a wider-than-expected third-quarter loss, the largest in its history.
Shares of Tesla have risen more than 50 percent since the beginning of the year.
Tesla's soaring stock has made the company the second-most valuable USA automaker behind General Motors Co (GM.N), which had annual net profit of $9.4 billion in 2016.
Tesla's first mass market vehicle has been beset with manufacturing issues - and there' s no end in sight.
Tesla said in its third-quarter earnings letter that it's still hard to assess when it will sort out the "bottlenecks" that delayed Model 3 production in the third quarter. That, industry experts say, is among the reasons Tesla is nowhere close to its aggressive goal of building 500,000 vehicles annually by next year, majority Model 3s.
Tesla previously said it would make 1,500 Model 3's during the last quarter, but the firm dramatically undershot that goal.
By the time trading ended on Wall Street on Wednesday, TSLA shares were down 3.15% to $321.08. Shares of far larger automaker General Motors have climbed about 23 percent, while Ford shares are up almost 2 percent. The company had revenue of $2.79 billion for the quarter, compared to analysts' expectations of $2.50 billion.
There were reports last month that people on the waiting list were selling their US$1,000 reservations for as much as US$4,000 as new buyers looked for ways to jump the queue.