There is about a week left until the launch of Tesla's new battery technology and CEO Elon Musk seems enthusiastic, as it appears from the tweet in which he writes that "many interesting things will be revealed".
The tweet is on a Friday and was relaunched throughout the weekend. It's been liked nearly 166.000 times, which is way more than a typical Musk tweet (he has nearly 39 million Twitter followers).
Tesla stock (ticker: TSLA for Tesla shares) was up 12,6%, returning above $ 400 per share to close at $ 419,62. It's a great result in just one day, but what exactly do investors expect?
battery day
Expectations about the new battery can probably be framed into four sections: battery cost, reliability, production capacity, and new technology. The cost of batteries has always been a big problem for electric vehicles.
To date, batteries, inverters and electric motors are more expensive than a traditional motor, drive system, exhaust system and fuel tank. Achieving a battery cost of less than $ 100 per kilowatt hour would be an industry milestone that would help increase accessibility to electric vehicles by lowering the purchase cost and bringing it closer to that of a traditional vehicle.
Battery reliability has been an issue since the introduction of electric vehicles. Tesla's success eased this concern. The older Model S sedans are still in operation and Tesla vehicles hold their resale value well.
Now Wall Street is talking about a million-mile battery, a battery that can last longer than the life of the car. Tesla's battery partner Panasonic (6752.Japan) recently announced increased production capacity at Tesla's Nevada facility.
Investors want to make sure there are enough batteries to sustain growth. Wall Street predicts Tesla's sales will increase by about 40% in 2021. Finally, there are always new battery chemistry and technologies to investigate.
Forecast for the future
Tesla's "battery day" should help investors choose what will be commercially available in the coming years and what will remain in the lab for a while. A company called QuantumScape plans to produce a solid-state battery, a technology just out of the lab.
It recently announced its intention 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 the impact on Tesla stock after the event.
Tesla shares have risen about 400% year to date, crushing comparable returns from the S&P 500 and Dow Jones Industrial Average and traditional automotive competitors. Investors think EVs are here to stay, driven in part by advances in battery technology.
