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TESLA IS WORKING on new battery technology that CEO Elon Musk says will allow the company over the next three years to build sleeker, more affordable cars that can travel dramatically longer distances on a single charge.
But the battery advancements that the entrepreneur unveiled yesterday at a highly anticipated event didn’t impress investors.
They expected Tesla’s technology to mark an even bigger leap and propel the company’s growing shares to even greater heights.
Tesla shares lost more than 6% in extended trading after Musk’s presentation.
That deepened a recession that began during yesterday’s regular trading session as 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.
He reiterated that schedule during yesterday’s show, then added that 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 in the future,” Musk said during an event shaped by restrictions imposed by a pandemic that requires people to keep their distance.
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 or more on a single charge, exceeding the distance many gas-burning cars can travel before needing to refuel.
Musk took the stage to a primarily 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 California factory.
“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.
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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 are going to accelerate, ”he said.
He added that he believes Tesla will stay one step ahead of its competition in the electric vehicle market and persuade more consumers to abandon gas-fired cars with its new battery technology.
The advancements he described 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, he has regressed slightly from that goal, although yesterday he said he thinks the £ 19,750 Tesla car will be capable of driving on its own.
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