Tesla Giga Berlin Will Put an End to "logistical nightmare" in its Supply Problem, Wedbush Believes

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Tesla (NASDAQ: TSLA) vehicles are very popular and at the moment the demand significantly exceeds supply. As soon as Giga Berlin and Giga Texas begin their work, this problem must be solved for Tesla, says the Wedbush analyst.

Tesla consolidated its position in the global automotive market as soon as Giga Shanghai began operations. Despite the fact that the production capacity of the factory will soon reach 450,000 units per year, this still cannot meet demand. However, production at Giga Berlin and Giga Texas is due to start this year, which should significantly help expand the company and saturate the market with its electric vehicles. Wedbush analyst Daniel Ives says the expansion of Giga Berlin—and soon Giga Texas—is “another notch on the belt for Musk & Co. to drive the broader EV vision globally."

Although the start of work at Giga Berlin may still be delayed by the bureaucratic apparatus of Germany, the factory will still be up and running, leading to an expansion of Tesla's production capacity. “While further delays could still happen given the red tape involved, we view this news as a positive step on expanding Tesla's broader manufacturing capacity globally,” Ives said.

Giga Shanghai has become the manufacturer's export hub, but the delivery of vehicles to Europe presents many logistical challenges and is volatile. As soon as Giga Berlin is operational, this "logistical nightmare" will be finished and delivery times will be shortened. “Right now many Model 3's/Y's produced in China are being exported to Europe in a logistical nightmare that is not sustainable and thus pushing back delivery times for customers throughout the region,” the analyst said.

Ives views the Berlin and Austin factories as major manufacturing centers that will play a big role in the "long-term Tesla EV story." The analyst believes that Tesla will be able to produce millions of electric vehicles annually, far more than the 870,000-900,000 vehicles that he estimates the company plans to produce this year. Ives maintains an Outperform (Buy) rating on Tesla stock along with a $1,000 price target.

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