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Tesla is working on new battery technology that CEO Elon Musk says will allow the company to make sleeker, more affordable cars that can travel much longer distances on a single charge.
But the battery advances revealed Tuesday at a highly anticipated event appeared to disappoint Wall Street, with the businessman saying it will take years to develop the improved batteries. Investors expected Tesla’s technology to mark an even bigger leap and propel the company’s growing shares to greater heights.
Tesla shares lost more than 6% in extended trading after Musk’s presentation, and the shares fell another 8% on Wednesday. That deepened a slide that began during Tuesday’s regular trading session when investors began to prepare for a possible disappointment. Musk raised those concerns with a series of tweets Monday warning that Tesla’s new battery technology might not be ready for high-volume production until 2022.
“The stock is down on knee-jerk reaction as the biggest disappointment of the event from a street perspective was that there was no million mile battery announcement in our opinion as it was expected to be revealed.” Wedbush analyst Dan Ives said in an investigation note.
But Ives remains optimistic about Tesla’s future, citing the company for making its vehicles more affordable. The company’s shares are still on a roll this year, more than 366%.
Musk reiterated that schedule during Tuesday’s show, saying it could be up to three years before the battery technology translates into a new Tesla model that sells for $ 25,000. That would be a dramatic downgrade from Tesla’s cheapest car now, the Model 3, a sedan that starts at $ 35,000 but generally ends up costing buyers more than $ 40,000.
“We don’t have a truly affordable car, and that’s something we want going forward,” Musk said during the event.
New battery design
Tesla unveiled its patented cell called 4680, named after its cylindrical measurements of 46 millimeters by 80 millimeters, which offers 6 times the power of its previous cells, 16 times the range and 5 times the energy capacity, according to Ives in his research note, that he believes the new cell is “a hub for [Tesla’s] future vision of EV with significantly reduced costs and much longer ranges. ”
Tesla estimates that a 14% cost reduction per kilowatt-hour can be achieved with the new “biscuit-tin” battery cell design and 18% more with its new smaller and more efficient Terafactory manufacturing design.
The new battery will also be cobalt-free, The Verge reported. Expensive and rare, the mineral cobalt It is used in virtually all common device batteries, including mobile phones, laptops, and even electric vehicles. A lawsuit Last year’s file accused some of the largest technology companies in the United States of complicity in the killing and maiming of hundreds, if not thousands, of African children mining cobalt. Tesla was one of the defendants named in the lawsuit, along with Apple, Google’s parent company, Alphabet, Microsoft and Dell.
In addition to reducing the price, Musk promised that the new battery technology would help Tesla reduce the size of its vehicles by approximately 10% and expand its range by 56%. That projection implies that Tesla cars using the new batteries will be able to travel 500 miles (800 kilometers) or more on a single charge, exceeding the distance many gas-burning cars can travel before needing to refuel.
Shareholders in cars
Musk took the stage to a mostly online audience, though there was a small group of shareholders who won a lottery for the right to sit in Tesla vehicles parked in a lot near the company’s Fremont, California factory, located about 40 miles (64 kilometers). southeast of San Francisco.
“It’s a little difficult to read the room with everyone in cars,” Musk joked as he began his presentation during an initial phase of the event that was dedicated to Tesla’s annual shareholders meeting.
But shareholders in attendance frequently honked their horns to provide a different form of applause as Musk recited Tesla’s accomplishments since the company held its last annual meeting 15 months ago.
Since then, Tesla has posted four consecutive quarters of earnings to reverse a long history of losses, while boosting production and laying the groundwork for future expansion by opening or starting work at three more factories in Shanghai, Berlin and Austin, Texas. All of that progress has seen Tesla’s stock price rise fivefold so far this year and increased the company’s market value to nearly $ 400 billion.
No one has benefited more from the run-up than Musk, who has seen his estimated wealth rise to $ 89 billion, the fifth-largest fortune in the world, according to Forbes magazine estimates.
“What happens when companies grow is that things tend to slow down. We’re going to speed up,” Musk said Tuesday.
A step forward
He said he believes Tesla will stay one step ahead of its competition in the electric vehicle market and persuade more consumers to abandon gas-burning cars with its new battery technology. The advancements it described Tuesday involve some highly technical changes to battery composition and design, along with new manufacturing processes.
Even as Tesla tries to set new standards in batteries, Musk made it clear that the company will continue to rely on Panasonic and other suppliers as well.
Musk has a history of being overly ambitious in his promises. For example, 17 months ago, it boasted that Tesla was on the verge of making breakthroughs in autonomous driving technology that would allow the company to deploy a fleet of robotic taxis by the end of this year.
Since then, it has backtracked slightly from that goal, though on Tuesday it said it believes the $ 25,000 Tesla car will be capable of driving on its own.
