One of Tesla's biggest advocates is giving up on his positive view of the carmaker's stock because of CEO Elon Musk's controversial behavior.

Nomura Instinet lowered its rating to neutral from buy for Tesla shares, citing concerns Musk's actions may hurt the company's brand.

"We have been one of the most bullish on TSLA shares since initiating coverage last October. … We continue to believe that Tesla could be a lot bigger than it is today," analyst Romit Shah said in a Tuesday note to clients entitled "No Longer Investable." "The issue though is the erratic behavior of CEO Elon Musk. During the second quarter, the switch seemingly flipped. … We are worried that this behavior is tainting the Tesla brand, which in terms of value is most important."