Tesla Could Trade 'Well Beyond' $900 Price Target Says Morgan Stanley Analyst

Amid rising Chinese regulation concerns, the growing consensus is that Tesla Inc (NASDAQ: TSLA) will face increased scrutiny in that market.

Morgan Stanley analyst Adam Jonas said Thursday on CNBC's "Squawk On The Street" that the firm has long expressed concern on the role of government policies, yet Morgan Stanley continues to recommend Tesla. 

Tesla's success in China should not be the main reason investors own the stock, he said. Although there remains the opportunity for Tesla in China, Jonas is focused on the company's ability to increase the number of vehicle models it offers.

Tesla could increase its model lineup "from just four today to maybe 24 in the coming years," Jonas said, adding Tesla could address markets for vans, trucks, SUVs and fleets. 

The Morgan Stanley analyst has a $900 price target on Tesla, but he told CNBC that as the company expands its model lineup and generates increasing recurring revenue from its software-as-a-service offering, the stock could trade "well beyond" the $900 price target.

Price Action: Tesla has traded as high as $900.40 and as low as $262.36 over a 52-week period.

At last check Thursday, the stock was up 0.53% at $647.98.