Leading investment bank JP Morgan has painted a bearish picture for Tesla stock (NASDAQ: TSLA). The bank lowered its ratings to ‘Underweight’, indicating that the EV car maker will go through rough terrains. TSLA opened Tuesday’s trading bell at $352 and remains under the bearish claws as it slumped nearly 20% year-to-date. It is among the least-performing stocks this year, displaying little to no price spurts.

JP Morgan predicted that Tesla stock could lose another 60% of its current value. The forecast estimates that TSLA is on its way down to the $145 range. That’s a steep decline and will erase a large chunk of capital from investors’ portfolios. The bank’s analyst, Ryan Brinkman warned traders to approach TSLA “with a high degree of caution.” This makes holding the equity a risky affair as the downside leads to a sharp cut in the wallet.

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Why Is JP Morgan Bearish on Tesla Stock? (TSLA)

JP Morgan pointed out the weak Q1 deliveries of the EV manufacturer, which recorded a pile-up of unsold cars. The company has sold 358,000 vehicles, which is 4% lesser than the estimated 385,000 delivery forecast. The unsold inventory will only lead to a loss in the balance sheet that will reflect badly on Tesla stock. “Record surge in unsold vehicles adds to free cash flow woes,” he wrote in a note to clients.

The EV manufacturer also produced 50,000 more cars than it sold during the last quarter. The only option to get them sold is to provide further discounts, but this would again eat into its profits. Therefore, in both ways, the company remains vulnerable as free cash flow remains grim. Its competitor, China’s BYD, is expanding across the EV sector, making it harder for Tesla to hold its ground. All of these are defining factors that are weighing Tesla stock down in the charts.