Trouble for Tesla? Stock Falls on Analyst Concerns. Some suggest the electric car company's shares had risen for the wrong reasons.

By CNBC Staff

This story originally appeared on CNBC

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

Shares in the electric car maker fell more than 9 percent by Monday afternoon, 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)."

Morgan Stanley analysts also wrote that Tesla may have difficulty keeping up with Chinese demand, 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.

"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."

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Citigroup Mistakenly Credited a Customer with $81 Trillion Instead of $280: 'Inputting Error'

An employee caught the mistake quickly, but the bank has recently made other errors that have drawn scrutiny and fines from regulators.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Science & Technology

The "Lazy" Entrepreneur's Guide to AI: 5 Tools to Run Your Business on Autopilot

Want to run your business on autopilot and escape the 24/7 grind? AI is the "lazy" entrepreneur's secret weapon! In this video, discover five game-changing AI tools to automate work, save time and boost profits.

Business Solutions

Save $90 on the Five Microsoft Programs Your Business Can't Live Without

Forget those expensive software subscriptions and get a great bargain for the top five MS Office programs.

Side Hustle

I've Made Hundreds of Thousands of Dollars With a Fun Side Hustle — And You Might Have Seen Me Doing It on TV

Phil Schraeder, CEO at GumGum Advertising, turned a childhood passion into a lucrative side gig.