Shares of Tesla (NASDAQ:TSLA) rose sharply on Monday. The automaker's stock increased as much as 5.3% before easing to a 4.5% gain as of 11 a.m. ET.
The growth stock's sharp gain was likely due to reports over the weekend that Tesla is set to begin production at its new factory in Germany by next month. An upbeat day for the overall market today is likely helping as well.
On an overall bullish Monday for stocks, the S&P 500 was up nearly 1% as of this writing, and the Nasdaq Composite was up about 1.3%. The market seems to be rebounding from a pullback on Friday, when news of a new COVID variant spooked investors.
But most of Tesla's gains on Monday are likely due to circulating reports that the company's new factory in Germany is finally about ready to come on line. The automaker is expected to be granted environmental permits to begin production within the next few days, according to German website Automobilwoche.
Tesla management has said that its factory in Berlin, which is expected to expand production capacity significantly, includes new manufacturing technologies. Bringing the new factory on line will likely reinforce the company's growing strengths in manufacturing. It will initially build only its high-volume Model Y at the factory.
For the full year of 2021, Tesla is on pace to grow deliveries more than 50% year over year. Long term, management expects 50% annualized growth to persist. But the automaker will need production capacity from new factories to come on line and ramp up quickly in order to achieve 50% growth next year.