What happened

Shares of Tesla (NASDAQ:TSLA) fell again on Thursday in early trading hours. The electric car maker's stock declined as much as 6.5% during the trading day. As of 10:05 a.m. EST today, however, the stock was down about 3%. Then, by 10:30 a.m. EST, it was up about 1%.

The stock's fall in early trading on Thursday follows its 17% decline on Wednesday. Of course, even after the stock recovered today, shares are still down sharply from levels above $900 achieved on Tuesday. The pullback Wednesday and the initial decline today are likely due to shares taking a breather following a meteoric run-up recently. They are still up more than 210% over the last six months.

A red Model 3 driving at sunset

A Tesla Model 3. Image source: Tesla.

So what

Perhaps contributing to further profit-taking on Tesla stock in early trading hours on Thursday was some bearish commentary from Morgan Stanley analyst Adam Jonas. It is too early to declare Tesla a winner in the global electric vehicle (EV) market despite the company's early lead in the space, Jonas said in a note to investors. He says that EV penetration of just 2% shows how there's still time for the competitive dynamics in EVs to shift.

Now what

While all the recent volatility for Tesla stock may tempt investors to take some sort of action, they should keep in mind that it's perfectly fine to stay on the sidelines or to simply hold shares through all the volatility, as long as the underlying business keeps executing.