“Tesla increasingly is a ‘2027 story,’” Evercore analysts led by Chris McNally wrote in a report Monday. He questioned whether the best-case scenario for a cheaper vehicle colloquially referred to as Model 2 is more like 500,000 units in 2026, rather than consensus for 1 million-plus.

McNally has the equivalent of a hold recommendation on Tesla and hasn’t rated the company a buy since he initiated coverage in January 2020, according to data compiled by Bloomberg. The stock has risen 310% in that span.

Chief Executive Officer Elon Musk has said Tesla is “between two major growth waves,” with the first underpinned by the Model 3 sedan and Model Y crossover, and the second expected from a cheaper next-generation electric vehicle. The company expects to start production of this EV toward the end of 2025 at its plant in Austin.

The next-gen model’s bill of materials will decline from $28,000 to $20,000, and likely have around 250 miles of range and no glass roof, McNally wrote. A “big debate” will be whether Tesla’s driver-assistance hardware will be standard, he said, citing his team’s belief that the hardware could cost $2,000 to $3,000.

Evercore now expects Tesla to deliver around 2.7 million vehicles in 2026, meaning its estimate for earnings per share that year is 18% to 20% below consensus.