“We are big believers in Tesla’s strategy and stand firmly by our claim that it is the world’s most important car company,” Jonas wrote. “But we do not expect the stock to appreciate so consistently and one-directionally from here.”

Struggling electric vehicles: “Tesla aside, nearly the rest of the auto industry’s efforts to successfully commercialize pure electric propulsion have fallen well short of the mark,” Mr. Jonas said. Many of the world’s biggest car makers have put “major electric-vehicle development on ice,” he added. ” Thankfully, Tesla is developing products that sell on attributes of consumer experience and sheer driving pleasure and are not dependent on government incentives. But the shot across the bow won’t help the debate.”

China demand: ” Tesla is not interested in achieving short term profitability at the risk of disappointing new customers, particular in the world’s largest, fastest growing car market,” Mr. Jonas said. “We believe demand for the model S and X in China will far outstrip Tesla’s ability to meet it, perhaps for many quarters or years to come.”

Democratization of electric vehicles: “Gigafactory benefits should be expected to make the Model 3 a better product, not a cheaper product,” he said. “We view Tesla as a niche player, not a mass manufacturer. We increasingly find investors with volume expectations far above our own.”

The end of driving?: “Our 15 year [discounted cash flow] coincides with the end of human driving and the dawn of crowd sourced mobility and mega fleets,” Mr. Jonas said. “Assuming people even buy cars at all, what will determine Tesla’s strategic and competitive advantage as a provider of mobility?…The rules are changing and at least some incumbent [auto makers, such as BMW] are not falling asleep at the (disappearing) steering wheel.”