Nomura Instinet analyst Romit Shah attributes the recent 10% pullback in shares of Tesla to Model 3 production, workforce restructuring and autonomous concerns as well as expectations for a weak Q3 report. In a pre-earnings research note titled “Don’t Get Spooked by 3Q,” Shah tells investors that Tesla’s upcoming quarter will likely miss expectations. The analyst believes gross margins could come in below his estimate of 17.8% given the high start-up costs related to Model 3 production, lower pricing for Model X and weaker than expected volumes. The quarter, however, will be Tesla’s most challenging of the Model 3 ramp and represent a trough for margins, Shah argues. He remains positive on the shares saying deliveries, margins and cash flow will bottom in Q3 and inflect higher over the next several periods. Shah keeps a Buy rating on Tesla with a $500 price target. The electric carmaker closed yesterday down 79c to $320.08.