Tesla CEO Elon Musk was in Germany this month to check on the construction of the company’s factory near Berlin.
Maja Hitij/Getty ImagesTesla’s battery technology day is about a week away and CEO Elon Musk seems excited, tweeting that “many exciting things will be unveiled.”
The tweet was sent Friday and picked steam over the weekend. It has been liked almost 164,000 times. That’s many times more than for a typical Musk tweet. (He has almost 39 million followers on Twitter.)
Tesla stock (ticker: TSLA) was on the move, up almost 6% Monday morning. But what exactly are investors expecting?
Battery day expectations can probably be divided into four sections: battery cost, reliability, manufacturing capacity and new technology.
Cost of batteries has always been a big issue for electric vehicles. To date, the batteries, inverters and electric motors have been more expensive than a traditional engine, transmission, exhaust system and fuel tank. Getting battery costs below $100 per kilowatt-hour is the number floated within the industry that will help increase penetration of EVs by dropping the cost of purchase closer to a traditional vehicle.
An EV comes, typically, with a 60 to 80 kilowatt-hour battery pack. That makes the cost of the battery cells at $100 per kWh roughly $6,000 to $8,000.
Battery reliability has been an issue since EVs were introduced. How long will the batteries hold up after being recharged again and again in all weather conditions. Tesla’s success has lessened that concern. Older Model S sedans are still running and Tesla vehicles hold their resale value well. Now Wall Street is talking about a million mile battery—one that can outlast the life of the car.
Tesla’s battery partner, Panasonic (6752.Japan), recently announced more manufacturing capacity at Tesla’s Nevada facility. Investors want to be sure that, at a minimum, there are enough batteries to support growth. Wall Street expects Tesla sales to increase roughly 40% in 2021 from 2020.
Finally, there are always new battery chemistries and technologies to investigate. Tesla’s battery day should help investors sort through what will be ready commercially in the next few years and what is still in the lab.
A company called QuantumScape plans to produce a solid-state battery, a technology just coming out of the lab. It recently announced plans to become a publicly traded company by merging with a special purpose acquisition company, or SPAC.
There will be no shortage of topics to discuss next week, including what happens to Tesla stock after the event. Tesla shares are up about 366% year to date, crushing comparable returns of the S&P 500 and Dow Jones Industrial Average and traditional automotive peers. Investors think electric vehicles are here to stay, driven in part by progress on battery technology.
Write to Al Root at allen.root@dowjones.com
"exciting" - Google News
September 14, 2020 at 10:21PM
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Tesla Stock Rises as Musk Tweets About ‘Many Exciting Things’ Coming on Batteries - Barron's
"exciting" - Google News
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