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Tesla plunges as analyst says too much, too fast

CNBC.com staff
Tesla plunges as analyst says too much, too fast

Tesla Motors (TSLA) stock dropped Monday morning after Morgan Stanley suggested that its shares had risen for the wrong reasons.

Shares in the electric car maker fell more than 8 percent-an over $24 drop-after Morgan Stanley researchers posited that they "do not expect the stock to appreciate so consistently and one-directionally from here."

One of the major concerns that the analysts noted is the failure of other electric vehicles across the developed world, which could lead to the industry to lobby for a "substantial revision" of air quality regulations "to slow down the pace of milestones they have little hope of achieving (besides Tesla)."

Read More Elon Musk: Tesla stock is 'kind of high' now

Morgan Stanley analysts also wrote that Tesla may have difficulty keeping up with Chinese demands, and that the eventual switch to autonomous vehicles may negate Tesla's current strategic advantages.

Still, the analysts said that Tesla's shares are ultimately worth $320, despite perhaps moving toward that target too quickly.

Last week Tesla CEO Elon Musk suggested that investors often "get carried away" with his stock price.

Read More Tesla chooses Nevada for battery factory

"I think our stock price is kind of high right now," Musk said last week, responding to a question from CNBC at a news conference. "If you care about the long term, Tesla, I think the stock is a good price. If you look at the short term, it is less clear."

-By CNBC staff