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SpaceX founder Elon Musk watches at a post-launch press conference after the SpaceX Falcon 9 rocket, carrying the Crew Dragon spacecraft, lifted off on an unmanned test flight to the International Space Station from the Center. Kennedy Space Station at Cape Canaveral, Florida, March 2, 2019.
Mike Blake | Reuters
Tesla CEO Elon Musk offered new delivery predictions for 2020 at the company’s shareholders meeting on Tuesday, where the company also detailed a new battery design that it claims will make its cars cheaper to produce. .
Musk said he expects vehicle deliveries to increase 30 to 40 percent from last year, when the company reported deliveries of 367,500 vehicles. Musk’s new guidance involves deliveries of between 477,750 and 514,500 cars, a range that encompasses the company’s previously stated goal of delivering half a million cars by 2020.
“In 2019, we had 50% growth. And I think we will do quite well in 2020, probably between 30% and 40% growth, despite many very difficult circumstances.”
Musk also said the battery and manufacturing advancements Tesla is working on will soon lead to lower prices, which will be vital to getting more electric vehicles on the road. “About 3 years from now, we are confident that we can make a very attractive $ 25,000 electric vehicle that is also fully autonomous,” he stated. However, Musk is known to be overly optimistic with his predictions.
In response to a shareholder’s follow-up question about the price cut, Musk acknowledged: “It’s not that Tesla’s profitability is incredibly high. Our median profitability for the last four quarters was maybe 1%. It’s not like we were. minting money. Our valuation. ” It makes it look like we are, but we are not. “
He continued: “We want the price to be as competitive as possible without losing money. If you keep losing money, you will die.”
The company’s shares fell as much as 7% during the presentation, which took place outside of normal trading hours.
Promised battery improvements
During the “battery day” portion of the presentation, Tesla confirmed that it has designed and is producing its own battery cells at a facility in Fremont, as part of its quest to make its cars affordable for a mainstream buyer.
In general, Tesla batteries, containing thousands of cells, are the most expensive part of the car.
Tesla’s senior vice president of powertrain and power engineering Drew Baglino described how the company’s new cells, dubbed “4680,” are larger and simpler to manufacture than the “2470” cylindrical battery cells it buys from Panasonic and other vendors today. A Tesla battery pack would require fewer cells with the new shape and design.
Baglino said the larger cells, along with other manufacturing and design changes underway at Tesla, would eventually improve the range of its cars by more than 50%.
In the short term, Tesla says its goal is to produce 10 gigawatt hours from the new battery cells at its pilot plant within a year. Musk noted that any cell it produces in Fremont would be complementary to cells worth 100 gigawatt hours that it buys from suppliers, saying that “to be clear, it will take about a year to reach capacity of 10 gigawatt hours.”
With its new cells, Tesla is also looking to reduce or completely avoid the use of some expensive materials used in lithium-ion battery production today, including cobalt.
The associate professor of civil and environmental engineering at Carnegie Mellon University, Costa Samaras, said: “If Tesla can make a cheap, reliable battery with little or no cobalt, it will really improve the ability of electric vehicles to scale. Most of the Cobalt is from the Democratic Republic of the Congo and mining has long raised concerns about human rights and child labor. “
On Monday, Musk warned that the advancements announced on Battery Day will not reach mass production until 2021, sending the company’s shares down 6% before Tuesday’s event.
Due in part to Covid-19 health orders limiting the size of in-person meetings, Tesla postponed its annual meeting from July this year to September 22, 2020. The company previously held its shareholders meetings at the Museum. of Computer History in Mountain View. California, but moved the event to the parking lot of its American vehicle assembly plant in Fremont. Shareholders parked and sat in their cars at the meeting, which Musk characterized as a “drive-in.” They honked the horn instead of applause.
Al Prescott, Tesla’s vice president of legal affairs, at the company’s socially estranged 2020 shareholders meeting, as attendees listen in their cars.
Those who wanted to attend had to get a winning lottery-style ticket (or other special access) to the meeting. Otherwise, shareholders could log into a website to ask questions that will be answered during the event streamed live.
Cannacord Genuity analyst Jed Dorsheimer wrote in a note to investors ahead of the meeting:
“The big question will be follow-up. It’s one thing to announce all these advancements, which might be great for boost algorithms, but like most TSLA things the devil will be in the details, which will sadly take some time to develop. . “
Cannacord maintains a “Hold” rating and a $ 442 price target on Tesla shares currently.
The electric car maker’s shares have risen more than 400% so far this year.
