Shares of the automaker rocketed to new highs this week, and closed up 1.44% at $425.25 on Tuesday. However, Morgan Stanley analyst Adam Jones cautioned in a note on Monday that Tesla's current valuation may not be sustainable.
Jonas, who maintains a $250 price target on Tesla shares, said that over time, Tesla will no longer be viewed as a tech company, but as a traditional automaker, threatening its current valuation of roughly $76 billion.
“We are not bullish on Tesla longer-term, especially as, over time, we believe Tesla could be perceived by the market more and more like a traditional auto OEM,” he wrote. “We are prepared for a potential surge in sentiment through 1H20 but question the sustainability.”
A positive third-quarter earnings report, coupled with reports of strong progress in Tesla's Shanghai factory, have pushed the stock higher in recent weeks.
On Monday, Reuters reported that Tesla secured a $1.4 billion loan from a group of banks in China that will allow it to expand production at the Shanghai factory.
Meanwhile, Bloomberg reported recently that Tesla is approaching a deal to purchase a plot of land in Germany to further extend its production capabilities outside of the U.S.
Tesla shares are up 37% so far in 2019.