By Chris Isidore, CNN Business
Tesla shares have been on a tear in recent weeks as Elon Musk marked the company’s first deliveries from its new Berlin factory, easing investors’ fears about whether the EV maker would receive the necessary approvals from the German government.
“I’d say 30% of investors we talked to over the last six months thought Berlin was never going to open because of the red tape and bureaucracy,” said Dan Ives, tech analyst at Wedbush Securities. “Many investors were fearing [Tesla] would never have a beachhead in Europe and it would just be an empty factory.”
The Berlin plant hosted a ceremony March 22 to mark its first deliveries as the rally in Tesla’s share price was well underway.
A similar event is planned next week at Tesla’s other new plant near Austin, Texas, which has already started deliveries. The two factories double the number of automotive assembly plants the company operates, joining its original plant in Fremont, California and its second factory in Shanghai.
The rally has taken Tesla shares from bear market territory to raging bull. On March 14 shares of the company closed at $766.37, down 36% from the high for the year, which was hit on January 3, the first trading day of 2022.
But in less than three weeks, shares have shot up, recouping most of the losses from the first 10 weeks of the year. Although shares closed narrowly lower Wednesday, they posted gains in 10 of 12 trading days since hitting that low, gaining 43% in that short stretch alone.
Tesla has managed to buck an unfortunate industry trend, in which overall production has been markedly slowed by a shortage of computer chips and other parts.
Tesla is due to report first quarter sales in the coming days. (The company doesn’t announce ahead of time the exact day it will do so.) The consensus is that global sales will come in near the 308,000 cars it sold in the fourth quarter. That would mark a 67% jump from the first quarter of 2021.
That would also be in stark contrast to the overall auto industry. US new car sales are forecast to fall about 15% from a year ago, according to both Edmunds and Cox Automotive, because of limited inventories and record high car prices.
Now that it has two new factories up and running, Tesla sales are forecast to grow even more through the rest of this year. Ives said by the end of December, Tesla should have an annual run rate of nearly 2 million cars, although the full-year total for 2022 won’t hit that target. Tesla sold 936,000 cars in 2021, and fourth quarter sales pushed its year-end run rate to about 1.2 million vehicles.
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.