Possible hiccups in Tesla 's battery development have lowered the ceiling for the stock, according to investment firm Canaccord Genuity. Elon Musk's auto company kicked off deliveries of its new Model S Plaid last week , but Tesla scrapped a higher price version. In a note to clients, Canaccord analyst Jed Dorsheimer praised the Plaid but said the failed upgraded version could signal struggles for Tesla's battery business. Dorsheimer cut his price target on the stock to $812 per share from $974. "Leading up to the delayed launch, Tesla canceled the top trim Model S Plaid Plus, which was reportedly going to be the first to feature the new 4680 cell design. This signals to us the new cell format isn't ready for production just yet, and cell production capacity constraints for energy storage products like Powerwall remain," the note said. Even with the reduced price target, Canaccord still projects 33% upside for Tesla. Dorsheimer has a buy rating on the stock. Other automakers, including Ford, are investing heavily in electric vehicles, but Tesla is still leading innovation in the industry, according to Canaccord. "Tesla also announced they designed and built a machine that can wind the copper rotors at much higher tension, allowing a more efficient electromagnetic field and maintain tighter gaps at higher rpm. We expect this to lead to industry-wide improvements in motor design," the note said. Tesla's stock has struggled in 2020, falling more than 13%. -CNBC's Michael Bloom contributed to this report.
Tesla CEO Elon Musk speaks at a delivery ceremony for Tesla China-made Model 3 in Shanghai, east China, Jan. 7, 2020.