Shares of Tesla (TSLA) - Get Report fell on Monday after reports that one of its Model S sedans spontaneously exploded in a Shanghai parking garage, and also after receiving a downgrade from analysts at research firm Evercore ISI.

Tesla shares were down 3.4%, or $9.32, at $263.94 in mid-afternoon trading on the Nasdaq Stock Exchange after reports surfaced on social media overnight that a first-generation model S sedan caught fire and exploded. 

Investors also reacted negatively to a report from Evercore ISI analyst Arndt Ellinghorst, who downgraded the company's stock to the equivalent of a sell from hold on expectations that demand for Tesla's cars will wane amid increasing competition.

"As growth estimates are coming down, valuation multiples should trend lower," Ellinghorst said. Investors may look past Tesla's Autonomy investor day scheduled to begin on Monday at 2 p.m. ET until they see more evidence of progress on the business model, he said.

A look at Tesla's debt situation.

Ellinghorst also lowered his price target on the stock to $240 from $330, and cut his delivery estimate for 2019 to 369,000 units from a previous 402,000.

Meantime, analysts at Wedbush reiterated their outperform rating on Tesla's stock and 12-month price target of $365 on Monday ahead of the company's autonomy investor day, though they cautioned that upcoming first-quarter earnings results expected this week are "clearly the elephant in the room."

"With production and delivery numbers missing Street expectations as the company announced earlier this month, the key focus on earnings/guidance will be around how much 'in the red ink' Tesla is for the March quarter and the path to sustained profitability in 2H19/2020," wrote analysts Daniel Ives and Strecker Backe.