Tesla Motors shares fell the most since early July Monday, the first day insiders could sell shares that they bought during the electric carmaker’s initial public offering six months ago.

Monday marked the end of Tesla’s “lock-up period”, 180 days during which investors who bought Tesla stock in its IPO could not sell their shares.

Investors’ doubts that the company could hit its targets in developing its Model S luxury sedan caused the stock drop in part, said Capstone Investments analyst Carter Driscoll, who set a $22 price target on the stock last week.

Tesla, which has not mass-produced a vehicle, has said the Model S is due in mid-2012 at $57,400.

Delays are part of the development process in the automotive industry, said Driscoll, who rated San Francisco-based Tesla a “sell” last week.

“They need to execute almost flawlessly versus their valuation for the stock price to be justified,” said Driscoll.

He said the expiration of the lock-up period was the primary reason behind the stock price’s fall, but the magnitude of the decline surprised him. Shares may climb higher in coming weeks leading up to the Detroit auto show, Driscoll said.

According to a November securities filing, Tesla had about 93.2 million common shares outstanding as of Sept. 30, most of which was restricted under the lock-up agreement.

Beginning Monday, the owners of 75 million shares could sell their stock, which could hurt the share price, Tesla said in their filing.

Tesla shares fell as much as 16.7 percent to $25.06 in trading on the Nasdaq. The stock was down almost 15 percent to $25.60 in afternoon trading.

Tesla debuted at $17 per share on the Nasdaq in late June. Its shares rose more than 40 percent on their first day of trading.