Tesla shares hit a record high on Tuesday on growing optimism around the company’s robotaxi strategy, with reported Europe battery expansion plans providing an added tailwind.
Tesla is reportedly gearing up to produce 8 gigawatt hours of battery cells a year at its sole gigafactory in Europe near Berlin as it seeks to unify car and battery cell making under the same roof. The company plans to start producing the increased volume of battery cells at Gruenheide in 2027, Reuters reported, citing a statement.
Tesla intends to invest “another three-digit million amount” in cell production, taking the total investments in the local cell factory to about 1 billion euros, the report said.
"The aim is to increase the vertical range of manufacture at the site: everything from battery cells to vehicles will be produced at a single location. This is unique in Europe and also strengthens the resilience of our supply chains," Tesla told Reuters while adding that the entire battery value chain will take place near Berlin in the future if “the conditions are right.”
Optimism around Tesla’s autonomous ride-hailing ambitions grew after Mizuho on Tuesday raised its price target to $530 from $475, while maintaining an ‘Outperform’ rating, citing improved investor sentiment on robotaxis.
Wedbush’s Dan Ives also said on Monday that the company’s market capitalization could double to $3 trillion by 2026-end in a bull case scenario as the company pivots hard into the autonomous driving and robotics sectors. Ives believes Tesla is entering what he called a “monster year” and has a bull case price target of $800 for the stock.
Tesla CEO Elon Musk said during the weekend that Tesla has begun to test fully autonomous robotaxis in Austin with no occupants in the front seat, marking an important milestone for the company’s autonomous driving vision.
The gigafactory in Berlin, where Tesla is planning a battery cell production ramp, is the company's only one in Europe. The company makes its best selling Model Y SUV in addition to battery cells at the plant.
However, Tesla’s sales in the region have been dropping. According to data from the European Automobile Manufacturers Association, Tesla sales in the European Union, free trade association and UK slipped 30% in the ten months through the end of October to 180,688 units, subsequently lowering the company’s market share to 1.6% from 2.4% in the corresponding period of 2024.
Separately, Reuters reported on Tuesday that the European Commission has unveiled a plan to drop the European Union’s ban on new combustion engine vehicles from 2035. The move, aimed at allowing for continued sales of non-electric vehicles after 2035, still needs approval from the EU government and the European Parliament.
Shares of Tesla closed 3% higher on Tuesday, marking three straight sessions of growth and hitting an all-time high of $489.88. On Stocktwits, retail sentiment around TSLA jumped from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume stayed at ‘high’ levels.
A Stocktwits user expressed optimism for the stock breaching $500 levels by tomorrow.
Another pushed for caution, highlighting high price-earnings ratio and the possibility of “another horrible” earnings.
TSLA stock has gained 21% this year and by about 6% over the past 12 months.
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