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Key Takeaways From Tesla’s Battery Day

Hyped up to deliver new and exciting tech, yet what occurred was a bit of a disappointment. So what did we learn at Tesla’s shareholder event?

Tesla (NASDAQ: TSLA) and its eccentric CEO Elon Musk have had an interesting year. They have faced a growing threat from Nikola, although this issue has largely sorted itself, and the teeny tiny case of a global pandemic which has disrupted many industries, including manufacturing. Undeterred by these ‘small’ problems, the cult-like businesses CEO hyped up this year’s shareholder meeting, stating ‘many exciting things’ were to be announced. 

Despite social distancing measures, Tesla decided to add some form of physical participation. Shareholders who won lottery-style tickets were allowed to drive down to the parking lot of its Fremont assembly plant and listen to the presentation from within Tesla’s own Model 3 cars, honking their approval at the new announcements. 

In a tweet sent on Tuesday evening, Elon Musk warned that the event would not have much in the way of immediate products to launch but rather would focus on things in development for closer to 2022. With that in mind, what exactly was announced, and what can investors look forward to from Tesla? 

Batteries

It was Battery Day, thus news of Tesla batteries was to be expected. The main takeaway from this section is that Tesla will continue working on reducing the cost of batteries. Musk also mentioned that in particular, he wants to make them safer and more humane. 

Cathodes — found in batteries — are currently made with cobalt, which is mined using extreme forms of labor that often violate human rights. Elon stated that Tesla wishes to diversify in the materials needed to build cathodes, removing the need to rely on the inhumane cobalt material. To do this, it will build a new factory, although the location is not yet confirmed. 

Plans were also unveiled to develop a new ‘tabless’ battery, which will hopefully improve the range by 16% and give it 6 times the power of the current batteries. This marks the start of a transition towards building its own batteries, which are currently sourced from Panasonic. Building tabless batteries in-house will drastically reduce the cost for a Tesla vehicle in the future.

Yet, investors were disappointed to learn that there was not much more to tell about the touted ‘million-mile’ battery, a battery patent that Tesla’s partner research team published earlier in the year. 

Vehicles

Tesla will aim to build a cheaper car as part of its cost cutting targets. Its goal will be to have a car that will only cost consumers $25’000. It says that this will be achieved through reductions in battery costs and moving more productions in-house. This is good news as it brings that affordability factor down for us mere mortals who cannot splurge on electric vehicles: the cheapest currently is $35’000, with the most expensive coming in at $124’000

The main product that was revealed is the sleek-looking plaid powertrain car. This vehicle will be available for delivery in 2021. With a range of 520 miles per charge and a top speed of 200 miles per hour. This newest edition to the Tesla fleet will cost $139,990. 

Takeaway

Apart from what has already been mentioned, this was a rather disappointing shareholders meeting. Yes, the honking cars were a fun little gimmick, but it could not detract from the fact that the whole event was based around the one idea of ‘cutting costs’, whether in battery production or in the eventual consumer price. As well as that there is growing disappointment surrounding the fact that Musk has reiterated that none of these changes will likely be felt until around 2022. That’s a long time in business terms. 

More interesting was the leaked email from Sunday night, in which Musk stated that ‘We have a shot at a record quarter for vehicle deliveries’. In addition, new guidance given from the event suggests that Tesla will hit its target for 500’000 deliveries by the end of 2020. This leads me to believe that Tesla will be posting a very good Q3 earnings report next month which might have a bit more ‘dazzle’ than what we saw on Tuesday. For investors, this might help alleviate concerns after a significantly lackluster shareholder meeting. 


MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Poppy Murray
Poppy Murray
Poppy is a contributing writer to MyWallSt. Poppy likes companies that go the extra mile. Her favorite stock is Amazon because she is fond of its innovation, variety, and creative solutions to sustainability.