Tesla big head: Berlin "super factory" approved the biggest suspense of the stock has been cleared

Dan Ives, an analyst at investment bank Wedbush and a well-known investor in Tesla, said in a report to investors on Sunday that it was crucial for Tesla to get approval for production in the "super factory" in Berlin.

After months of seesaw battle, Tesla's car and battery factory in Brandenburg, Germany, received production permits on Friday. The electric car leader was scheduled to start production in July 2021, but novel coronavirus's pandemic, supply chain bottlenecks and conflicts with environmental groups have slowed the company's progress.

"the 'biggest suspense' of Tesla's stock has been eliminated after German authorities said Tesla could start production at his new factory in Berlin," Ives wrote.

Ives, a well-known Apple and Tesla bullish, has a target price of $1400 for Tesla's shares, nearly 70 per cent higher than Friday's closing price of $838. He pointed out that the "super factory" plan is crucial to Tesla itself and its share price.

Tesla's market capitalization soared above the $1,000bn mark last year, but has since declined and is now around $850 billion.

"before that, the market saw red tape policies and headaches about production delays and disputes at the European flagship plant," Ives wrote. This has frustrated Tesla's investors, some of whom have begun to doubt whether the Berlin factory can open. "

According to the state government, the Berlin plant has been approved to produce as many as 500000 cars a year, higher than Tesla's original planned capacity of 450000.

"it is difficult to describe the importance of this factory to Europe and the world, but at least it ensures capacity in Europe so that Tesla does not use capacity elsewhere to fill European orders," Ives added.

, Model Y and Model 3 currently have a five-to six-month delay in different parts of the world, Ives said. Tesla's plant in Austin, Texas, and now the Berlin plant, should help solve production bottlenecks and alleviate these problems. Ives said, Model Y could become the "central business" of the Berlin plant in the next 12 to 18 months.

Wedbush maintained Tesla's target price of $1400 and his "outperform" rating on the grounds that Chinese demand would drive Tesla's growth and that new factories in the US and Germany were expected to ease its supply shortages. Wedbush believes that Tesla's annual production capacity will increase from 1 million in 2021 to 2 million in 2022.