Alexander Potter, Minneapolis-based analyst for Piper Sandler, lowered his price target on Tesla this week citing the COVID-related slowdown in China and other factors. (David Zalubowski | AP/The Minnesota Star Tribune)

Amid the accelerated decline in stock prices this week, the Minnesota analyst with one of the most bullish outlooks on one of the hottest stocks of the past two years, Tesla, lowered his target price on it.

The electric vehicle maker's production capacity has been crimped by the COVID-19-related lockdown in Shanghai, China, where it has its second-biggest factory, Alexander Potter, analyst at Minneapolis-based Piper Sandler, said in a note to investors on Tuesday.

As a result, he lowered his estimate for Tesla's full-year production by 70,000, or 4.5%, to 1.47 million units. A handful of financial metrics will contract as a result, Potter noted. He lowered his target price for Tesla's stock to $1,035 from $1,260, an 18% cut.

"Downside due to temporary factors will not detract from the longer-term thesis," Potter wrote. He wasn't available for comment on Friday, a Piper Sandler spokesman said.

Potter in January 2021 became the first analyst at a major investment bank to try to show why Tesla deserved a $1 trillion market capitalization, a point it reached last October and remained through early January. It briefly reached that level again in early March.

Tesla shares closed around $664 on Friday, down 13.7% for the week. In May 2020, Tesla shares were trading around $160 before taking off on a rocket-like trajectory unmatched by any other company of such size in that period. The shares peaked around $1,240 last November.

In his note this week, Potter zeroed in on the company's near-term challenges. He wrote that it's still too early for Tesla's recently opened factories in Berlin and Austin, Texas, to make up for the lost production in Shanghai, where its stated capacity is about 450,000 units a year.

Tesla's first and biggest factory, in Fremont, Calif., can produce about 600,000 units annually and has been running at full capacity for more than a year.

Customers who place orders on Tesla's U.S. website now encounter delivery times that are six to nine months out. Earlier this week, Tesla Chief Executive Elon Musk said in a tweet that the company may stop taking orders outside North America to relieve the imbalance between production and demand.

Even if its growth levels somewhat because of the China shutdown, Tesla's financial performance continues to improve generally. The company earned $3.3 billion in the first quarter, more than any other U.S. automaker.