Investment banking firms UBS and Goldman Sachs have both predicted a rocky future for Tesla.

A new report from UBS claims that Tesla stock is about to plummet as the company will not be profitable in 2019. UBS analyst Colin Langan said in a note to clients entitled “Is the pricing strategy a prelude to a capital raise?” that the firm was cautious on Tesla stock ahead of second quarter reports. Langan wrote: “We are cautious on TSLA Q2 results … Q2 results [will] likely highlight cash flow and profit challenges. The market should not ignore fundamental headwinds that persist with regards to TSLA’s Model 3 profitability, stationary storage, and solar. … [W]e believe TSLA will eventually need additional outside funding.”

Langan further affirmed his 12-month price targets for Tesla shares of $195, a 34 percent drop from Tesla’s share price as of Friday. Langan noted that the currently available Model 3 car configurations available for pre-order are at higher price points ranging from $49,000 to $80,000. “We do not see sustainable profitability in the second half;” wrote Langan. “However, given the higher priced initial mix, a Q3 profit is possible if TSLA can average production of over 3k/week. We expect margins to correct in 2019 as the mix normalizes toward a long term average,” he said. “Our Sell thesis remains focused on cash burn, sustainable profitability, and quality concerns.”

Goldman’s auto analyst David Tamberrino also outlined his firm’s lack of faith in Elon Musk’s company in an investors note. Tamberrino wrote that “the key focus areas revolve around (1) sustainability of Model 3 production, (2) pace and demand-variants of Model 3 order conversion, (3) margin improvement potential, and (4) FCF burn.” In the note Tamberrino introduced a new analysis of public sentiment surrounding the Model 3 based on social media posts. Tamberrino notes that: “Ultimately, we believe the data potentially points to waning customer enthusiasm for the vehicle as order availability and test drives have increased.”

The Goldman analyst lists his new assumptions and predictions for Tesla, most of which are positive.

2Q18 actual deliveries —where Model S/X deliveries were n slightly below our estimates but Model 3 deliveries fell a few thousand short (our 2Q18 delivery recap note);

—where Model S/X deliveries were n slightly below our estimates but Model 3 deliveries fell a few thousand short (our 2Q18 delivery recap note); Improved Model 3 weekly production in 3Q18 and beyond – we now forecast TSLA sustaining 4,000/week in 3Q, improving to approx. 5,000/week in 4Q;

– we now forecast TSLA sustaining 4,000/week in 3Q, improving to approx. 5,000/week in 4Q; Lowered Model S / X deliveries – we now forecast slightly softer demand internationally, primarily as a result of the price increases announced in China; our full year Model S/X forecast of 90k falls below the company’s guidance for 100k;

– we now forecast slightly softer demand internationally, primarily as a result of the price increases announced in China; our full year Model S/X forecast of 90k falls below the company’s guidance for 100k; Slightly lower gross profit margins – the combination of increased manual labor, the incremental production lines, and FX headwinds from the Euro and RMB;

the combination of increased manual labor, the incremental production lines, and FX headwinds from the Euro and RMB; Lowered SG&A profile – stemming from the company’s announced headcount reductions, we now forecast a reduction from 1H18 to 2H18 in SG&A expense as well as re-base future expense creep;

– stemming from the company’s announced headcount reductions, we now forecast a reduction from 1H18 to 2H18 in SG&A expense as well as re-base future expense creep; FCF estimates are also lowered for the quarter on a use of working capital – primarily due to the large increase of vehicles in transit at the end of 2Q18; we now forecast TSLA’s adjusted FCF burning $600mn in the quarter – leaving approx. $2.2bn in cash at the end of 2Q18. For the year, we now estimate a $1.5bn cash burn – and continue to forecast a capital raise in 4Q18a

For the next two years, a faster ramp in Model 3 production/deliveries and lower SG&A expense accrue to the bottom line of our forecast (GS EBITDA +11% on average). However, in 2020 and 2021 the lower volume trajectory and margin profile for the S/X slightly reduce our estimates (down an average 6%). For 2018 EBITDA, we are still 15% below FactSet consensus – and our 2019 through 2021 EBITDA is an average 30% below the Street.