Longtime consumer advocate Ralph Nader on Wednesday sounded a warning about the recent rally in Tesla's stock and called on regulators to consider a probe into trading based on its recent meteoric run.

"I think the Securities and Exchange Commission should pay attention to the protection of investors here and look in to see whether there's insider trading, potential market manipulating or even the ability to clear the transaction," Nader told CNBC.

Nader expressed concern for the investor community at large based on the stock's recent volatility and encouraged regulators to keep a close watch for any nefarious equity trading. Nader did not provide evidence of any specific underhanded trading.

His comments came as Tesla plunged 17.2% on Wednesday, a hefty loss for those who chased the stock in recent days.

Tesla shares are up more than 65% in the past month (and 221% over the last six months) as recent delivery numbers and better-than-expected earnings encouraged Wall Street that the electric car maker may finally be on track for consistent profitability.

Tesla did not immediately respond to CNBC's request for comment.

Nader also questioned the ethics of a bonus scheme that awards CEO Elon Musk $900 million if the company achieves a market capitalization of $100 billion over a sustained period. The company is currently worth over $130 billion after its recent run-up.

"When the stock market bubble implodes, it will have been started by the surge in Tesla shares beyond speculative zeal," Nader wrote on Twitter last month amid the run.

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To be sure, much of Tesla's recent surge is likely thanks to the large percentage of the company's stock that had been sold short, a fact Nader acknowledged as accentuating the stock's recent swings.

"I'm talking about the price of the Tesla stock. It's totally in the nosebleed territory. Tesla sold less than 400,000 vehicles last year and its valuation is greater than the combined valuation of Volkswagen and General Motors," Nader said.

"That tells you that there's a lot of speculation going on, a lot of short selling – a lot of short covering," he added.

The Palo Alto, California company was a popular target for those looking to make money by selling Tesla shares short and buying back the stock later at a lower price. In fact, Tesla was the most-shorted stock in the U.S. market as recently as January.

But as the shares hit record highs throughout January and early February, more and more of those shorts were forced to capitulate and buy the stock back, fueling the run even further and scaling the losses for Tesla's shorts.

The bets against Tesla were so concentrated that those betting against the company lost in excess of $1.5 billion on a mark-to-market basis in a single session last week, according to data firm S3 Analytics.