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Author: Alan LittleDate: 2021-12-28

Tesla (TSLA) +2.52% as Wedbush says production capacity to double in 2022

Tesla (TSLA) shares will have a 30% upside in 2022 according to Wedbush analyst Dan Ives who sees strong Chinese demand and new factories as a major boost.

Tesla (TSLA) shares closed 2.52% higher on Monday and could be set for more gains today after Wedbush said the electric car maker is on track to double its production capacity by the end of next year.

On a new note, analyst Daniel Ives said Tesla is currently struggling to keep up with demand for its vehicles, with Model 3s and Model Ys particularly affected by recent supply chain and labour shortages.

The issues have resulted in delays of up to six months for delivery, but that is likely to change in the coming months with the upcoming launch of two sizeable Giga factories in Texas and Berlin.

Tesla is expected to finish construction of its US-based Giga factory in Austin by 31 December 2021 ahead of a full opening in 2022.

Berlin is further ahead, with Ives estimating that after some last-minute red-tape is dealt with, cars should be coming off the line by February at the latest.

That will be a huge boost for Tesla as it will double its production capacity when both facilities are open, which will allow around 2m vehicles to be manufactured annually.

“The key to alleviating these issues centred around the key Giga openings in Austin and Berlin which will alleviate the bottlenecks of production for Tesla globally,” Ives added.

The significant increase in capacity combined with strong demand in China should drive share gains for TSLA next year.

Ives expects Tesla stock to have around 30% upside in 2022, which is impressive considering the company is already worth more than $1tn.

On Monday, Tesla shares finished the session 2.52% up on the Nasdaq and will open on Tuesday at $1,093.94.

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