The electric car company had been a red-hot growth stock but lost more than a quarter of its value in the session, ending down roughly 14.5 percent, at $151.16 a share. The decline was especially noteworthy considering that Tesla had reported better-than-expected earnings Tuesday, Cramer said on " Mad Money ."
So what happened?
Tesla had also delivered softer-than-anticipated revenue, and deliveries of its Model S disappointed some market observers. To Cramer, fewer sales was a breakdown in execution, especially as the automaker has continued to enjoy high demand. As it turned out, the lack of execution might not have been Tesla's fault, but its stock certainly paid for it.
(Read more: Tesla slammed, despite expanding production )
"As long as the cars are beloved and the company can meet the demand, then Tesla was going to go higher," he said. "But if one thing goes wrong-and in this case it was a shortage of batteries that led to fewer car sales that people were whispering about-then it's all over but the shouting, at least for now. A production problem with batteries, not a demand problem with customers, was responsible for Tesla's sloppy execution."
Tesla's stock has climbed some 350 percent this year, but Cramer said the company has attracted a cult-like group of investors who gave it no room to make any mistakes.
"I have recognized it as a cult stock, and I can't game a cult," he said. "Today the Kool-Aid was laced with cyanide, but I have no doubt that when the battery issue is resolved, the cultists will be right back in action."
The lesson is that growth stocks can't live by growth alone, Cramer said. Execution matters, otherwise the stock could fall, as Tesla did today.
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