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A new voice added some clarity to the debate around Tesla, always a controversial stock, arguing that investors should look at the maker of electric vehicles as a car company, rather than a tech stock.

BNP Exane, the research arm of French bank BNP Paribas, downgraded Tesla (ticker: TSLA) shares from the equivalent of Buy to Hold on Thursday, even as he raised his target price for the stock. Paribas still likes the EV maker, but noted a few things U.S. investors should pay attention to in coming months. The downgrade report was a different look at Tesla—the company—and how investors are valuing, or overvaluing, the stock today.

Analyst Stuart Pearson is no Tesla bear. He has had a Buy rating on the stock since launching coverage in October 2019. “Tesla remains uniquely well placed to capitalize on a 2020 boom in global [electric vehicle] demand,” wrote Pearson in his research report. “The debate has shifted beyond the realms of the pure [battery-electric vehicle] story to an energy and tech-play vision with which we are less comfortable.”

Tesla isn’t a traditional car company. It has ambitions, for instance, to create a fleet of self-driving taxis, built using Tesla vehicles and relying on Tesla autonomous-driving software. Before bearish investors dismiss the idea out of hand, don’t forget that Uber Technologies (UBER) has a market value of more than $60 billion. That is about 60% of Tesla’s market capitalization.

Tesla also has a residential battery-storage business, a network of charging stations, and a solar-panel company. All those assets are worth something. It appears Pearson, however, doesn’t want to value Tesla on a sum-of-the-parts basis.

“We fear the stock rally is forcing the debate to whether Tesla can become a tech-stock,” said the analyst. “Tesla offers differentiated technology and product—but remains a car stock.”

The rally, of course, has been epic. Tesla shares are up about 125% over the past month, crushing comparable gains of the S&P 500 over the same span and making Tesla the second-most valuable car company on Earth, trailing only Toyota Motor (TM).

“Its winning streak may be interrupted in [the first half of] 2020,” adds Pearson. Three issues are behind his concern. For starters, U.S. and European EV subsidies are falling. There are less tax benefits to buying an EV. What’s more, he believes start-up costs for the new Shanghai plant, as well as Model Y production, could pressure profit margins in 2020. Finally, all the activity in China and with the Model Y could require more working capital.

That is means less cash flow in 2020 as balance-sheet items such as inventory increase. Both bull and bears always focus on Tesla’s cash flow.

It is a well reasoned position and one that isn’t solely reliant on stock valuation, a frequent theme among bearish investors. Tesla trades for about 80 times estimated 2020 earnings. It is a high multiple for a car company.

Pearson, for his part, increased his price target from $400, which he set in December, to $555 Thursday. That is about 3% below current levels, however, so he downgraded the shares.

Tesla stock closed up slightly Thursday, despite the BNP news and another downgrade, from UBS . Bulls and bears are entrenched.

Polarization isn’t new to Tesla CEO Elon Musk. He’s a controversial figure, too. Musk battled the Securities and Exchange Commission, as well as short sellers in 2019. So-called shorts sell borrowed shares betting on price declines. David Einhorn, founder of Greenlight Capital, has been short Tesla stock in the past, even trading tweets with Musk over Tesla’s stock performance.

Wall Street remains as polarized as Musk and Einhorn. Analysts’ price targets range from $225 to $800 a share. The $575 spread is more than 100% of the current share price. And the lowest target is about 60% below the stock’s current level. Both numbers are far outside normal ranges for stocks in the Dow Jones Industrial Average.

“Time to recharge,” said Pearson. He is pausing to catch his breath, believing Tesla stock is about to do the same.

Write to Al Root at allen.root@dowjones.com