Tesla Inc.’s “wheels are falling off,” sometimes literally, and the Silicon Valley car maker appears to “again be on the brink” of failure, David Einhorn’s Greenlight Capital told investors Friday.

Hedge-fund titan Einhorn is a frequent Tesla critic who has called Chief Executive Elon Musk “erratic and desperate” and last year compared Tesla’s path to the path of doomed investment bank Lehman Brothers.

In its quarterly letter to investors dated Friday, Greenlight criticized Tesla’s safety record and then homed in on Tesla’s operational performance and demand.

Related:SpaceX’s Falcon Heavy launches its first real payload

While Musk may promise Model 3 worldwide demand of around 500,000 to 700,000, “the reality is quite different,” as demand from the fan base has already been satisfied, Greenlight said.

“If Q1 is any indication, total annual global demand for the Model 3 is 200,000 vehicles,” it said. “We believe that (Tesla’s) poor reputation for quality and service and diminishing tax incentives are limiting broader demand.”

Tesla has responded with price cuts, but those have generated only minimal demand and weigh on used Teslas, which the company is exposed to through its leasing program, Greenlight said.

“We believe that right here, right now, the company appears to again be on the brink,” Greenlight said.

“The signs are everywhere, from the lack of demand, desperate price cutting, layoffs, closing-and-then-not-closing stores, closing service centers, cutting capex, rushed product announcements and a new effort to distract investors from the demand problem with hyperbole over (Tesla’s) autonomous driving capabilities,” it said.

Tesla late Thursday announced another tweak to its vehicle line-up and sales strategies. It stopped online sales of the $35,000 Model 3 version. Customers can order that “standard” version over the phone or in Tesla stores.

Tesla shares have lost 9% in the last 12 months, versus 9% gains for the S&P 500 index. SPX, -2.37%

No other company merited as much space on Greenlight’s quarterly letter as Tesla, with the hedge fund discussing its investment in Brighthouse Financial Inc. BHF, -1.99% in only a few paragraphs.

Greenlight started the six-page letter saying that 2019 “has started off on a good note,” touting 11% returns for the first quarter, “almost reversing the loss in the fourth quarter” and compared with a return of nearly 14% for the S&P.

Earlier this year, Greenlight faced a wave of redemptions that pushed its assets under management below $3 billion, from about $5.5 billion in the middle of 2018 and $12 billion five years ago.

See also:Tesla stock falls after report that Gigafactory expansion is on hold

It was still a “challenging environment’ for Greenlight’s investment style as growth stocks performed better than value stocks.

“In the context of this headwind and a sizable short portfolio, we are pleased with the quarterly result,” said the letter.