Tesla Analyst Cuts Price Target By 17% On Potential Battery Delay

Tesla, Inc. TSLA began deliveries of its Model S Plaid last week, and following the event, an analyst at Canaccord Genuity revisited his price target for the electric vehicle stock. 

The Tesla Analyst: Jed Dorsheimer maintained a Buy rating on Tesla shares and reduced the price target from $974 to $812.

The Tesla Takeaways: The Model S Plaid's debut is continued evidence of Tesla's system-level approach to design and engineering, Dorsheimer said in a Monday note.

This time, beyond the battery, the company went deeper into the electric motor, the analyst said. 

The new motor is carbon-wrapped, an industry first, to provide the improved strength-to-weight ratio necessary to keep the motor from tearing itself apart at 20,000 rpm, he said. 

Tesla also announced a machine that can wind the copper rotors at a much higher tension, allowing a more efficient electromagnetic field and maintaining tighter gaps at higher rpms, Dorsheimer said.

"We expect this to lead to industry-wide improvements in motor design," the analyst said. 

Related Link: Why Wells Fargo Says Tesla's Present Is Perfect, Future Tense

Tesla, according to the analyst, innovates while other OEMs play catch-up.

This is a product of the company's culture, and places it further ahead on the innovation curve compared to legacy OEM competitors, he said. 

"Tesla is creating an energy brand and an Apple-esque ecosystem of products with customer focused connectivity, seamlessly marrying car, solar, and back-up power," Dorsheimer said.

Tesla canceled the top trim Model S Plaid Plus, which was reportedly going to be the first to feature the new 4680 cell design, the analyst said.

This signals the new cell format isn't ready for production just yet, and cell production capacity constraints for energy storage products like Powerwall remain, he added.

This — coupled with macro near-term uncertainty surrounding inflation and Fed policy causing a sector rotation out of growth and into value names — has led to a 17% reduction in Canaccord's price target for Tesla shares, the analyst concluded.

TSLA Price Action: Tesla shares gained 1.28% in Monday's session, closing at $617.69. 

Photo courtesy of Tesla.