Tesla shares could start to see a reversal in the fourth quarter after a huge rally this year, as the “flaws in the growth story” begin to show, according to one major bear, CNBC reports.

Barclays auto analyst Brian Johnson, who put a US$300 price target on Tesla in February, questioned the outlook for the electric carmaker, despite the company posting second-quarter earnings that beat market expectations.

First, he said that while Tesla CEO Elon Musk has promised “industry-leading” margins, according to its earnings results released Wednesday, that is not likely to happen.

“That’s clearly not what he (Musk) is going to do, he is trying to do revenue growth,” Johnson told CNBC’s “Street Signs Asia.”

The analyst then went on to say that if sales of Tesla’s Model 3 sedans produced in China were stripped out, revenue from its “Fremont factory actually appear to be down 30 percent.”

Finally, Johnson said that sales of the Model Y crossover SUV, which started being delivered to customers in March, could eat into sales of the Model 3.

“At some point we think that the growth narrative could come undone. That will be perhaps closer to second half or 4Q when it becomes apparent that Model Y might be cannibalizing Model 3 sales and when we see just what the run rate of demand for Model 3 really is,” Johnson said.

Tesla’s share price has been on a tear in 2020. Shares are up over 280 percent this year and closed at US$1,592.33 on Wednesday. Johnson is not suggesting his US$300 price target will be hit in the fourth quarter, but is suggesting a fall in the price could take place.

“So I’m not under ... (the) illusion that even though my US$300 is based on valuation of this as a automaker that the market is going to agree with me … anytime soon,” he said.

Johnson also took aim at Tesla’s goal to deliver 500,000 vehicles this year. In the first half of the year, Tesla delivered 179,387 cars.

“He (Musk) did say half a million was still the target but my target is to finish a marathon in under three hours and I don’t think I’m going to get there,” Johnson said.

Bear bets on Tesla shares tumbling from highs of US$1,592