Images showed the Italian's Astana team car pulling alongside him and then both he and the car accelerating rapidly.
Judges decided Nibali was either towed by the car as he held it, or grabbed a water bottle extended from the window.
Britain's Chris Froome lost four seconds to rival Nairo Quintana as Esteban Chaves won the stage.
Nibali, winner in 2010, had lost 88 seconds after being involved in the crash with around 30km of the stage remaining.
Meanwhile, Tour de France champion Froome is chasing a Vuelta-Tour double that has been done just twice before.
However, he could not match Quintana's kick on the final ascent as he finished seventh in Caminito del Rey.
Colombian Chaves leads the overall race by five seconds after beating Dutchman Tom Dumoulin, with Froome's Team Sky team-mate Nicolas Roche in third.
Ireland's Roche made his bid for victory on the steep 4.5km climb to the finish line but ran out of energy in the closing couple of hundred metres, leaving Movistar rider Chaves and Giant's Dumoulin to fight out the sprint for the line.
Chaves picked up 10 bonus seconds for being first.
Quintana rode clear of the chasing bunch before eventually finishing sixth, 26 seconds adrift of Chaves, and being credited with the same time as Spain's Joaquim Rodriguez.
Froome finished one second ahead of another of his rivals for the overall victory, 2009 Vuelta champion Alejandro Valverde.
Stage two result:
1.  Esteban Chaves (Col/Orica)               3hrs 57mins 25secs
2.  Tom Dumoulin (Ned/Giant)              +01sec
3.  Nicolas Roche (Ire/Team Sky)              +09secs
4.  Daniel Martin (Ire/Cannondale)            +14secs
5.  Joaquim Rodriguez (Spa/Katusha)             +26secs
6.  Nairo Quintana (Col/Movistar)                     Same time
7.  Chris Froome (GB/Team Sky)               +30secs
8.  Alejandro Valverde (Spa/Movistar)           +31secs
9.  Daniel Moreno (Spa/Katusha)                          Same time
10. Fabio Aru (Ita/Astana)                      +37secs
General classification after stage two:
1.  Esteban Chaves (Col/Orica)     3hrs 57mins 15secs
2.  Tom Dumoulin (Ned/Giant)    +05secs
3.  Nicolas Roche (Ire/Team Sky)    +15secs
4.  Daniel Martin (Ire/Cannondale)  +24secs
5.  Joaquim Rodriguez (Spa/Katusha)   +36secs
6.  Nairo Quintana (Col/Movistar)           Same time
7.  Chris Froome (GB/Team Sky)     +40secs
8.  Alejandro Valverde (Spa/Movistar) +41secs
9.  Daniel Moreno (Spa/Katusha)                Same time
10. Fabio Aru (Ita/Astana)            +47secs
Vincenzo Nibali was thrown off the Vuelta a Espana when TV images showed him being towed back into the pack after a crash on stage two on Sunday.