Police had a suspect in custody but admitted they had the wrong man and released him early on Tuesday evening.
The man had been arrested in the Tierpark, a large park in west Berlin, shortly after the attack, after a bystander had followed the driver of the truck as he fled the scene.
But it now seems that somewhere along the way, he lost site of the real perpetrator and took police to the wrong man.
The Süddeutsche Zeitung reports that the evidence against the 23-year-old Pakistani suspect did not match up from the start.
The cabin of the truck had been covered in blood, because the attacker shot the truck's driver after apparently struggling with him.
But no traces of gun powder residue were found on the suspect's hand, nor did investigators find any blood on his clothes. From the start, the man denied the crime.
For much of Tuesday afternoon it was also apparent that police were still looking for the real attacker as they released warnings over Twitter for Berliners to remain on their guard.
With the release of the suspect the police now appear to be back at square one.
Terror group Isis have claimed the attack, but have not released a video of the attacker as they did after "lone wolf" attacks in Würzburg and Ansbach in July.
"We can't rule out that the perpetrator is on the run," Interior Minister Thomas de Maiziere told broadcaster ZDF, adding he was confident there would be "progress" in the inquiry.
De Maiziere said several lines of inquiry were being pursued, but "we should let the security services do their job."
"No-one will rest until the perpetrator or perpetrators have been caught," he told ARD public television.
Even before the arrested man was identified as an asylum seeker, critics of the government on the right claimed that the attack was the result of Angela Merkel's refugee policy, which has led to 1.2 million people applying for asylum in Germany since the start of 2015.
The truth at this stage is though, that there is no public information on who the attacker could be.
Federal prosecutors said on Wednesday that the attack could have been carried out by one person or a group of people.
Before Isis claimed responsibility, prosecutors' only evidence it was a terror attack was that it was similar to the truck rampage in Nice in the summer.
Analysts took this as a sign that they have very few concrete leads at this stage as to who was behind the attack.
If its is true that Isis were behind the attack, Germany has a home grown Islamist scene which could have orchestrated it.
In November police raided 200 addresses linked to an Islamist group which they claim has sent more than 140 German youths to fight in Syria.
The BfV, Germany's domestic intelligence service, estimates that the number of radical Islamists in Germany totalled about 9,200 as of the end of October and continues to rise. The number of potential Islamist terrorists is estimated to be 1,200.