Electric vehicle giant Tesla (TSLA) just put a huge amount of cash behind its Giga Berlin battery plant, with plans to more than double its capacity. The plant will go from an annual capacity of eight gigawatt-hours (GWh) to 18 GWh. But investors seemed oddly displeased by this notion, perhaps wondering where all those batteries are supposed to go. Tesla shares plunged over 4% in Tuesday afternoon’s trading.
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Tesla will put an extra $250 million into Giga Berlin’s battery production, as the Grunheide factory will see its annual capacity soar. Interestingly, this expansion was almost promised after Giga Berlin workers voted to pass on a works council election that featured IG Metall. Tesla previously noted that there would be no expansion if IG Metall got control, and with IG Metall out, the expansion is going through.
For those wondering where all those batteries will go, though, there seems to be a plan. Reports note that Tesla now expects everything “…to be produced at a single location starting in 2027.” That means everything from battery cells to electric vehicles, which suggests a likely pathway for all those cells.
Convenience or Threat?
There are mounting concerns over wait times when it comes to Tesla’s Robotaxi service, currently active in three cities. And while the wait times are proving inconvenient, some wonder if this is actually part of a much larger problem of safety.
The wait times are getting downright egregious, with a five-mile drive taking close to an hour to accomplish by the time the “high service demand” and “no rides available nearby” messages got through. But Tesla has long been clear that safety was the “limiting factor,” and all these bottlenecks and delays are simply the result of Tesla prioritizing safety so hard that it will not take chances. Increasing the number of available vehicles, meanwhile, would simply increase the likelihood of safety incidents, a fate Tesla is eager to avoid.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSLA stock based on 12 Buys, 12 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 33.21% rally in its share price over the past year, the average TSLA price target of $403.86 per share implies 4.54% downside risk.
