Tesla Inc.’s (NASDAQ:TSLA) long wait to commence operations at its Giga Berlin manufacturing is ending. The company is set to officially open the plant on Tuesday.
The Tesla Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and $1,400 price target on Tesla shares.
The Tesla Thesis: With Giga Berlin, Tesla is establishing a major manufacturing footprint and factory within Europe, analyst Ives said.
“Tomorrow Musk & Co. will officially cut the red ribbon on the Giga Berlin factory,” the analyst noted.
The opening of Giga Berlin, the analyst said, is one of the “biggest strategic endeavors” for Tesla over the past decade. This will jump-start the company’s market share within Europe over the coming years, he added.
The approval of German authorities to officially begin production at Giga Berlin removes a major overhang on the stock over the past few months, Ives said. The inordinate delays and disputes, the analyst noted, had frustrated investors, leading some to wonder if the European factory would ever come online.
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The analyst sees the production start at the plant as key to the overall success of Tesla’s footprint in Europe and globally. The current practice of producing cars in China at Giga Shanghai and delivering to customers throughout Europe was not a sustainable trend, the analyst said.
“The Berlin factory establishes a major beachhead for Tesla in Europe with potential to expand this factory to production of ~500k vehicles annually with Model Y front and center over the coming 12 to 18 months,” Ives said.
Giga Berlin is a major competitive advantage for Tesla, especially at a time competition is heating up, with the likes of Volkswagen AG (OTC:VWAGY) doubling down on its EV ambitions, the analyst said.
TSLA Price Action: Tesla shares closed up 1.74% to $921.16.
Photo: Model Y courtesy Tesla Inc