Tesla, Inc. TSLA is apparently faced with a demand problem in the face of economic uncertainties and intense competition. A Tesla bear sees more problems for the electric vehicle manufacturer.

What happened: Two very negative China-centric data points will emerge over the next few days, the GLJ Research analyst said GordonJohnson.

• A slump in sales in China from May
• April factory data in Shanghai is likely to show that Tesla produced 9,000 more cars than it sold this month.

This, according to the analyst, will Fears are mounting that Tesla has a demand problem in its largest and only profitable market in China.

See also: The best stocks for electric vehicles

Direct sales model hurts? The direct-sales model used by companies like Tesla and most other U.S. electric-vehicle makers is likely to give margins a massive headwind when the global auto industry hits a recession, Johnson said.

The legacy automakers have dealer franchises and when push comes to shove, they can still recognize inventory sitting on lots as revenue, the analyst said. This is reflected in the reported margins and appears on the balance sheets of retailers rather than manufacturers.

But for most EV manufacturers, when they produce more cars than they sell, it translates not only into lower sales but also lower gross margin, the analyst said.

peak reached? Johnson said peak profits for Tesla could be seen in the rearview mirror as new entrants and all major OEMs launch new EVs with different prices, better interior space, similar or faster charging speeds, and much better quality.

Tesla opens its US charging network to everyone eliminates the last reason to buy his “now trailing edges” EVs, he said.

“In our view, Wall Street remains secretly criminally bullish,” the analyst said. He noted that Wall Street’s 2023 EPS estimate for Tesla has fallen from $6 to $3.23 over the past seven months. The metric will likely deteriorate in 2024, he said.

Tesla closed Tuesday’s session down 1.54%…