‘Battery Day’ Tesla disappoints shareholders

Tesla’s stock price has fallen by more than 5 percent following the plans Elon Musk unveiled yesterday on Battery Day. Tesla is mainly concerned with making gradual improvements over the medium term. A really big hit did not materialize.

Before ‘Battery Day’ the rumor mill was running at full speed. The event turned out to be decent hyped and it was expected that Tesla would come up with revolutionary concepts that would take electric driving to a much higher level. Yesterday, Musk tried to temper expectations a bit via Twitter. In the end, Tesla did not present groundbreaking new technologies, but rather evolutionary improvements.

Future plans

Tesla seized Battery Day to unveil the 1,100 horsepower Model S Plaid. This new top model should offer all-shattering performance for a relatively favorable price. In addition, plans for a cheaper model were announced. Perhaps more interesting is the news about how the company plans to manufacture and implement batteries in the future. Tesla wants to get rid of the controversial and expensive cobalt. Thanks to a new architecture of the cells in the battery, a 16 percent increase in range is promised. The price per kWh is also reduced by 56 percent. In addition, the battery pack must become an integral part of the car. According to Tesla, this means that additional reinforcements to the chassis are no longer needed, which means that more space is created for extra battery capacity.

In addition to the technology in the battery and its implementation in the car, Tesla wants to take more control over the production of the batteries. The production process must be optimized, which, according to Tesla, should lead to a 69 percent reduction in production costs. This reduces the investment required to start production on a larger scale, which will ultimately contribute to a healthier financial picture for the company and cheaper cars for the consumer.

Disappointment

However, shareholders cannot disguise their disappointment at the lack of more concrete announcements: Tesla’s share price fell by more than 5 percent. Apparently more fireworks were expected on ‘Battery Day’. What probably also did not help was that Musk did not link a concrete timeline to the stated goals. All he said about it was that he expects it will take about three years to fully realize the revealed plans. Investors generally do not like this uncertainty.

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