Tesla ‘s push toward growing sales volume over margins could spell trouble for Elon Musk’s company, according to Jefferies. The firm downgraded the electric vehicle maker’s stock to hold from buy and lowered its price target to $185 from $230. That equates to upside of 15% from Tuesday’s close. Analyst Philippe Houchois said in a note Wednesday that, while Tesla moving to prioritize growing volumes of EV’s over higher sales margins “has its logic,” this process will also shift investor expectations. “However fascinating the investment case remains, relative price aggression is not supportive of a high multiple investment case while unfolding,” Houchois said. The EV giant left worried last week after reporting quarterly results . The company is now focused on selling larger volumes of vehicles to generate higher revenue as opposed to fixating on stronger margins with less sales. This strategy is in line with Tesla’s overall strategy of selling 20 million vehicles annually by 2030. And Houchois thinks earnings will continue to lag while the company is in the middle of this transition. He added that, while Tesla has proven an ability to be a leader in the industry in terms of software development, the company still needs to catch up in other areas. “With multiple technical edges from software to batteries and manufacturing productivity, Tesla clearly over-performs on engineering but has fallen behind in building skills in marketing and product planning,” Houchois said. Tesla shares have jumped 30% year to date. However, the stock is down more than 22% this month. TSLA YTD mountain Tesla in 2023 — CNBC’s Michael Bloom contributed to this report.