Analyst Alexander Potter upped the firm's price target to $360 from $344 a share in a note to clients Thursday. He said that while a price cut to Tesla's cars may signal a demand issue to some investors, it's actually a measure in helping the company address its backlog problems. "In other words: Tesla is striving for higher production, shorter wait times, and lower prices," Potter wrote.
At the same time, Tesla was also forced to temporarily halt most production at its Shanghai factory amid Covid-19 restrictions in China. That said, Potter believes that recent upgrades to Tesla's Shanghai facility should unlock more production capacity for the electric vehicle maker, with Piper Sandler expecting the factory to produce roughly a million units annually. "Faster production equates to shorter wait times," Potter wrote.