(Reuters) - Goldman Sachs on Thursday cut its price target on Tesla Inc by 21%, to third lowest on the Street, on concerns about the sustainability of demand for the electric car maker’s models.

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Earlier this month, Chief Executive Officer Elon Musk told shareholders that Tesla was on track to hit its volume production goal for the year and had “a decent shot at a record quarter on every level”.

Goldman Sachs analyst David Tamberrino believes although the second quarter has been witnessing a better environment for demand for Tesla’s cars, he doesn’t think it is sustainable.

“While there is potential upside surprise from a faster ramp or pull forward of Model Y ahead of schedule, there is likely cannibalization of current Model X and Model 3 product demand with a crossover variant,” Tamberrino wrote in a note.

Analysts have questioned if there is global demand for the hundreds of thousands of Model 3 sedans and other vehicles Tesla aims to produce, after deliveries fell 31% in the first quarter.

“We believe that is the largest question for investors to underwrite at this point — what are sustainable demand levels for the Model S, Model X, and Model 3 — and how does that change with the introduction of Model Y production,” Tamberrino said.

The brokerage maintained his “sell” rating on the stock and cut its target by $42 to $158, 34% below the median target, saying the Street is “still modeling too optimistic sustainable volumes for Tesla”.

Tesla stock has seen more session wins in June than losses, a rare for the company which has lost 33% in value so far this year. However, led by Musk’s near-term delivery promises, shares have bounced back lately. June so far has been the best month since October for Tesla stock.

Tamberrino expects the downward spiral for shares to resume as it becomes more clear that sustainable demand for Tesla’s products are below expectations.

Shares of the company were marginally down at $226.10 in early trading.

Twelve of 31 brokerages covering the stock rate it “buy” or higher, 7 “hold” and 12 “sell” or lower, according to IBES data from Refinitiv.