Merrill Lynch has continued its negative campaign against Tesla Motors Inc. (NASDAQ: TSLA) as analysts John Lovallo II and John Murphy have yet again made the most bearish call on the electric auto producer. The firm reiterated an Underperform rating with a price target of $65.

Note that Merrill Lynch has continually reiterated an Underperform rating for Tesla for over a couple of years now. Investors probably are not happy with the brokerage firm as they might have missed the boat. In this time, Tesla shares have gained roughly 475% to current prices since the end of December 2012.

The $65 price target is the most negative of all analyst calls and implies a downside of 66.6% from current prices. The consensus analyst price target from 17 brokers is $267.82, implying upside of 37.6%. The median price of the group came in at $280, showing that Merrill Lynch’s target is putting a fair amount of downward pressure on the consensus price target.

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The case for Tesla “technology” has suffered, according to Merrill Lynch. This comes from Audi’s introduction of its 2015 R8 etron, which has a 91 kWh (kilowatt-hour) battery unit with 280 miles in range and a curb weight of 4,100 lbs. These specs compare favorably to Tesla’s Model S. Also Audi’s battery packs reportedly have the ability to toggle between different cell types, from virtually any vendor.

News reports this week indicate that Tesla’s China situation could be even worse than expected, as the company reportedly has roughly 2,300 vehicles in inventory in the country. This could result in the need for discounting, which likely would have a negative impact on consumer perception and weigh on resale values.

Lovallo and Murphy explained their views on Tesla in the report:

We view Tesla as a trailblazer in the electric vehicle market and believe the company could be successful as demand for alternative drivetrains accelerates in the years ahead. However, we continue to expect both consumer pull and regulatory push for auto fuel efficiency to be met primarily with downsized, turbocharged internal combustion engines on lighter frames. Therefore, in our view, electric vehicles could remain more niche than mainstream over the foreseeable future.

As Tesla is falling at this time, the valuation by Merrill Lynch is slowly gaining traction, but it is still a long shot for the price as it stands now.

In the noon hour Tuesday, shares of Tesla were down 0.5% at $194.68, in a 52-week trading range of $177.22 to $291.42.

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