Tesla shares could drop as low as $10, Morgan Stanley analysts predicted Tuesday.
The investment firm has lowered its bear forecast for the automaker from $97 to $10 per share, saying it was worried about Chinese demand for the company’s products.
“Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention,” said analyst Adam Jonas in a note to investors.
The $10 per share mark is an extreme example and well below the company’s current trade level, which is over $200 per share in mid-morning trading Tuesday. It does, however, show increasing concerns among investors.
Bear models from investment firms look at worst case scenarios and are not predictions of performance under normal circumstances. Morgan Stanley’s “base-case” target remains $230 a share.
Jonas also cited Tesla’s debt load as a factor in his change in the worst case model. The company recently secured $521 million in loans from Chinese banks.
China is an important market for the automaker. It’s building a $5 billion factory in the country which will allow it to bypass shipping costs and make Tesla vehicles more affordable to Chinese consumers.
The country has also been a drag on the stock, though. Shares plunged earlier this month amide fears that China’s tariff retaliation would soon hit cars, affecting Tesla’s bottom line.
Tesla’s stock was down just shy of 2% in trading Tuesday.
More must-read stories from Fortune:
—How to invest during a trade war
—The 9 biggest IPOs of all time
—The uncomfortable truth about going public with a money-losing business
—Trade war takes giant bite out of Apple’s market value
Subscribe to our new audio briefing, the Fortune 500 Daily.🎙