The approval of the Berlin Gigafactory has removed a significant obstacle for Tesla's stock.

• Tesla's Berlin "Gigafactory" is of utmost importance, according to Dan Ives, a well-known Tesla bull, in a note to investors Sunday.
• Tesla's market cap surpassed $1 trillion for the first time in October, but it has been steadily declining and is now valued at approximately $850 billion.

After German authorities gave the green light for production at a new factory in Berlin, a "major overhang" on stock has been removed, as per Wedbush analyst Dan Ives.

The conditional license for Tesla's vehicle and battery plants in Brandenburg was anticipated after several months of delays. Despite plans to begin vehicle production by early summer of 2021, the Covid pandemic, supply chain issues, and conflicts with environmentalists impeded progress.

Ives, a renowned Tesla investor who predicts the stock's growth, stated in a letter to investors on Sunday that the Berlin "Gigafactory" is crucial to both Tesla and its stock value. Despite Tesla's market cap reaching over $1 trillion for the first time in October, it has been steadily declining and is now worth approximately $850 billion.

Ives wrote that the red tape and headaches surrounding the delays/disputes opening up Giga Berlin's flagship European factory had been frustrating for investors to watch unfold, as many on the Street were doubting if the factory would ever actually open.

The success of Tesla's footprint in Europe and globally is highly dependent on the importance of Giga Berlin's production, as the current logistics of producing cars in China at Giga Shanghai and delivering them to customers throughout Europe is not sustainable in the long run.

Tesla sees the Berlin factory eventually producing up to 500,000 vehicles annually.

The company's Model Y is expected to be the main focus at the factory in the next 12 to 18 months, according to Ives.

Tesla is currently experiencing delays of up to six months for Model Ys and certain Model 3s in various regions, according to Ives. However, he believes that Tesla's factories in Austin and Berlin will help to resolve these issues and address production bottlenecks.

According to Wedbush, Tesla is predicted to boost its annual run rate from 1 million units in 2021 to 2 million in 2022.

Ives set a $1,400 price target for Tesla's stock, an increase of approximately 68% from Friday's closing price of $838.

— Additional reporting by Michael Wayland and Lora Kolodny.