Tesla continues to grow, expansion of the German Gigafactory on the way

Tesla continues to grow, expansion of the German Gigafactory on the way

Tesla continues to grow

Elon Musk’s hunger for expansion now seems unbridled, after announcing its intention to expand its factory in Shanghai, Tesla filed an application to increase the size of the Berlin Gigafactory. The automaker currently operates a 300-hectare site in Germany that includes an automobile factory and battery plant still under construction. The revision of the plan provides for an increase in the area of ​​100 hectares, 10 thousand square meters, which will be used for the creation of a freight station, logistic areas and additional parking. The Gruenheide municipality committee will discuss this on June 2 and may decide whether to approve the plans as early as June 23, reports Auto News.

Tesla's German factory has the capacity to build 500,000 vehicles per year and 50 GWh of batteries, making it Germany's largest electric vehicle site. It is unclear when Tesla will ramp up production to reach target capacity, but when the factory opened in March, it hired only 3,500 of the initially imagined 12,000 employees. Although the road now seems clear and smooth, achieving this goal for Tesla has not been easy at all; the factory, in fact, has undergone numerous stops with some even of a rather bizarre nature. At the moment, within the site, production is entirely dedicated to the new Model Y SUV, which we recently had the opportunity to test in the Performance version.

Tesla Model Y is the most requested model of the American house and delivery times now well exceed two quarters; moreover, the version produced and assembled in Germany is today one of the most advanced and perfect, with a higher quality of assembly than that found with the other sites.

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Why Tesla Stock Jumped on Friday

What happened

Shares of electric-car maker Tesla (TSLA -1.81%) were trading sharply higher on Friday. Specifically, the stock rose as much as 6.7% Monday morning and was up 5% as of 10:50 a.m. ET.

The stock's gain was likely driven by a combination of an upbeat day in the overall stock market, as well as an analyst's bullish comments on the stock on Friday.

So what

Year to date, Tesla stock has declined about 29%. This decline, which is worse than the S&P 500's 13.5% pullback during the same period, has created an attractive buying opportunity for investors, according to Credit Suisse analyst Dan Levy.

Levy's bullishness comes after he visited Tesla's factory in Fremont, California. Though he acknowledged that near-term pressure on Tesla's deliveries due to challenges at its factory in Shanghai is likely, he was upbeat about continued manufacturing momentum at its factory in California. Overall, Levy remains bullish on the company's long-term opportunity.

Tesla vehicle interior.

Tesla Model Y interior. Image source: Tesla.

The analyst has an outperform rating on the stock and a price target of $1,125. This 12-month price target impressively translates to about 50% upside from where shares are trading today.

Now what

Investors, of course, shouldn't rely on analyst price targets to choose stocks. They should do their own due diligence and consider whether the stock's current valuation is attractive relative to the underlying business's momentum and the company's long-term growth potential.

But to Levy's credit, Tesla's underlying business seems to be performing exceptionally well this year. Despite global supply challenges in the automotive industry and a pause in production at Tesla's factory in China during Q1, the company managed to grow production 61% year over year and deliveries 68%. Further, Tesla continues to expect to grow deliveries 50% or more this year.