Will Tesla continue to move higher in 2222? There are three reasons

Tesla's production and deliveries in 2021 will hit record highs, continuing the continuous growth since 2012. However, Dan Ives, an analyst at WadeBus Securities, said the 2021 record is likely to be surpassed by 2022. He gave three reasons why Tesla will continue to rise:

Ives, who has been one of Tesla's most high-profile bulls on Wall Street over the past few years, believes Tesla's performance in 2021 shows a strong determination to address parts and chip shortages and vows not to let bottlenecks affect its production figures in the same way.

These bottlenecks may cause many large automakers to report negative data compared to last year. Tesla regularly informs investors and enthusiasts of its ability to stem chip shortages, including a statement on the Q2 2021 earnings call announcing that it designed, developed and validated a series of 19 controllers, helping it avoid and mitigate large-scale disruptions in the production and delivery process.

Ives said Tesla is doing a better job of this than any other automaker. Looking ahead to 2022, Ives believes Tesla's impressive performance will continue, citing three major factors for Tesla's continued rapid rise in global automakers. While Tesla's valuation leads all auto companies worldwide, the company's next goal must be to increase annual production and deliveries to gradually approach the annual operating speed of 1 million vehicles.

Two plants are put into operation

Ives listed Tesla's two new manufacturing plants as the first step in the company's rise in 2022. The Berlin and Austin plants were scheduled to open in 2021. However, the start-up of these facilities has been affected this year due to the pandemic and other problems in Germany, but they will be online in 2022 and will be operating at full capacity.

The commissioning of the two new plants will have a huge impact on Tesla's growth forecasts, as they will both contribute to the speed at which Tesla continues to grow. With both plants fully operational in the second or third quarter of 2022, Tesla could double its current production between 2021 and 2022 if all goes according to plan.

China is growing rapidly

China has proven to be one of Tesla's most successful markets, and Ives believes that the growing operating rate of the Shanghai factory will continue to drive Tesla's growth. There is no doubt that Tesla is still a strong force in China, despite fierce competition. However, that didn't stop Tesla from doing exceptionally well in the field.

In the past two months, Tesla has delivered more than 50,000 cars per month in China. In addition, Tesla also exports cars from China to Europe to make up for the difference in demand for the Berlin plant that is not in production.

New equipment and increased demand drove production growth

Ives predicts that Tesla's sales will grow by 55 or 60 percent in 2022, largely thanks to new factories in Austin and Berlin. That could be the key to Tesla's higher stock price and valuation, in addition to more efficient batteries. More importantly, however, Tesla's increased production could put the company on par with many of the larger car companies, especially if it could surpass the annual production of 1 million cars, which should be easy, given the projected production volume after the increase in production lines in Berlin and Texas.

Ives reiterated his $1,400 stock target, as well as his "outperform" rating for Tesla stock. Of the 7,756 analysts surveyed, Ives ranked 22nd in his estimate. His investment success rate is 76% and the average return is 36.4%.