Tesla (NASDAQ: TSLA) announced this weekend that the production of its electric vehicles at Gigafactory Berlin in Germany would begin in November. The start date is a timely advantage that Tesla has, according to Wedbush analyst Dan Ives, who believes the ramp of production at the Berlin Gigafactory and Gigafactory Texas, also slated for initial manufacturing later this year, will coincide with the scheduled growth of the EV sector over the 12 to 18 months.
Ives, a Tesla bull who holds a $1,000 price target on the stock with a “Buy” rating, said that the overall growth of the electric vehicle industry is set to give Tesla an array of advantages based on their strategic planning and scheduling of the initial production phases at its new factory.
CEO Elon Musk announced this past weekend that Gigafactory Berlin would begin building the Model Y as soon as November. Musk made the announcement at the massive “Giga Fest” event, where Tesla displayed some of its newest manufacturing and engineering feats, including the structural 4680 pack and two new vehicle colors that will be produced at the Berlin factory.
Tesla Giga Berlin’s first goal is to produce one Model Y body every 45 seconds
Tesla’s manufacturing prowess goes far beyond its factories in Berlin and Texas. Additionally, the automaker operates a facility out of Northern California, known as the Fremont Factory, which it has owned since 2010. Tesla also has a facility in Shanghai, which, despite only being active since early 2020, has a higher production rate and capacity than the Fremont facility.
The outlook for the electric vehicle sector over the next several years is bullish, to say the least. With more companies opting to shy away from the continuance of combustion engine vehicles and opt into the transition to electrification, the sector as a whole will likely experience tremendous growth as a whole. Electric vehicles, due to their efficiency, range, environmental advantages, and quickly decreasing prices, are becoming the more logical option for car buyers, as long as they can afford them. Tesla, being the undisputed industry leader, without a doubt has the most to gain from the growth of the EV industry. The company offers the best cars in terms of range, performance, technology, and software.
Now that Tesla will be able to produce more vehicles, wait times will begin to decrease as production figures increase. Over the next several years, especially with the active operation of the Berlin and Texas factories, Tesla may be able to continue its dominance of the sector, especially with the timely production start dates of its new manufacturing plants.
Ives is ranked 25th out of 7,689 analysts on TipRanks. He has a 75% success rate and an average return of 35%.
Disclosure: Joey Klender is a TSLA Shareholder.