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Tesla shares lost ground in morning trading after an analyst downgraded the company's stock and called the company "no longer able to invest," citing the "erratic" behavior of CEO Elon Musk.
"We fear that this behavior will tarnish the Tesla brand, which, in terms of value, is the most important," wrote Romit Shah in a research note published Tuesday.
Shah, a self-described "bull" on Tesla's prospects, has lowered his rating on the title to "neutral" from "buy". He added: "Consumers are capricious and we suspect they might be afraid to buy a Tesla if they think the company is not in the long run."
Tesla shares fell 2% early in the session. The stock lost about a quarter of its value in the last month.
Already under surveillance for its public access, Musk last week seemed to smoke marijuana during a live interview with comedian Joe Rogan. The incident rekindled questions about whether Musk is the right person to run Tesla after deciding to deprive the company and claiming that a British diver had helped a young football team in Thailand.
Shah is now Tesla's second contributor to challenging Musk's leadership. Venture Capital Gene Munster wrote last week that the CEO's behavior "made Tesla's support as a company increasingly difficult." He condemned Musk uses recreational drugs.
Shah added, "We believe that Tesla needs better leadership (and a certain face) and we move until we see what's going on with management."
Tesla drops color choices
Separately, the electric car manufacturer is abandoning two of the seven standard colors it has offered to customers as it attempts to streamline production.
On Tuesday, in a tweet, CEO Elon Musk said black obsidian and metallic silver would still be available, but at a higher cost.
Tesla fans can always choose standard black and silver metallic colors, as well as pearl white, metallic deep blue and red.
The company, based in Palo Alto, Calif., Has struggled to move from a niche manufacturer of expensive electric vehicles to a mass-market automaker.
More than 400,000 people are on a waiting list to buy a Tesla; Some have been waiting since March 2016, when the company started taking orders.
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