Tesla's stock tumbled 17% yesterday, hitting the brakes on a dramatic rally as a senior executive said the coronavirus outbreak in China would delay deliveries of its Model 3 cars.
Analysts also issued warnings about the company's high valuation.
With Tesla still up more than 25% since the company posted its second consecutive quarterly profit a week ago, Canaccord Genuity cut its rating on Tesla to "hold" from "buy".
This further shrank the already small number of analysts who recommend buying the stock.
Tesla Vice President Tao Lin said on the Weibo social media platform that car deliveries from its new Shanghai plant would be temporarily delayed and that the company planned to restart production on February 10.
The $2 billion factory is a key part of chief executive Elon Musk's plan to make more than half a million cars this year.
Tesla last week said it expected a delay of up to a week and a half in the ramp-up of Model 3 production at the Shanghai plant after the Chinese government ordered it to shut the factory due to the outbreak.
The coronavirus outbreak has disrupted business across China, with the government there saying that the death toll had reached 490 as of Tuesday, up 65 from the previous day.
Tesla's rally of over 300% since early June has been a vindication for Musk, who has transformed a niche car maker with production problems into the global leader in electric vehicles, with US and Chinese factories.
Still, many investors remain skeptical that Tesla can consistently deliver profit, cash flow and growth in the face of competition from established rivals including BMW and Volkswagen.
Even many Tesla bulls question the stock's valuation following its recent, electrifying surge.
