Tesla stock up as Elon Musk cuts ribbon on Berlin Gigafactory expected to produce 500,000 vehicles a year

Tesla Inc. shares rose 2% Tuesday, as Chief Executive Elon Musk cut the ribbon on the company's first manufacturing facility in Europe, its 5.5 billion euro ($5.5 billion) Gigafactory in Berlin. The plant is based in Gruenheide, a coal town that sits within commuting distance of the German capital. Musk did a dance as he oversaw the delivery of the first German-made Tesla vehicles to 30 clients and their families, CNBC reported. The ceremony was also attended by protesters, who are concerned at the high amount of water it will use and the number of trees that were felled to build it. The factory is expected to produce up to 500,000 electric cars a year. Wedbush analyst Dan Ives, a Tesla bull, said the Berlin plant is "one of the biggest strategic endeavors for Tesla over the last decade and should further vault its market share within Europe over the coming years as more consumers aggressively head down the EV path." In a note to clients published Monday, Ives said the decision by the German authorities to clear the plant to start production removes a major overhang on the stock for the past few months. "We cannot stress the production importance of Giga Berlin to the overall success of Tesla's footprint in Europe and globally, as the current Rubik's Cube logistics of producing cars in China at Giga Shanghai and delivering to customers throughout Europe was not a sustainable trend," the analyst wrote. Wedbush has an outperform rating on Tesla stock and a 12-month price target of $1,400 that is about 58% above its current price. Tesla shares have gained 40% in the last 12 months, but are down about 11% in 2022 to date, while the S&P 500 has fallen 6%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.