Tue, 09/22/2020 – 20:45
“In about three years from now, we are confident we can make a compelling $25,000 electric vehicle that is also fully autonomous,” Musk said at the event. “This has always been our dream from the very beginning.”
Yesterday brought a solid hint that Battery Day would be a disappointment for Tesla fanatics after Elon Musk broke character and – dare we say it – offered up a bit of reality and reason as it related to timelines he would be discussing at today’s event.
Maybe Musk was paying extra close attention the hot water Nikola CEO Trevor Milton has gotten himself into as a result of aggressive timelines and misstatements about products that may or may not exist – ironically, a move Milton likely took out of Musk’s playbook. That’s because Musk felt the need to set timeline expectations on Monday when he Tweeted: “This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.”
Important note about Tesla Battery Day unveil tomorrow. This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.
— Elon Musk (@elonmusk) September 21, 2020
Thus the fate of battery day was sealed before it even began.
Perhaps market participants, after watching the Nikola One roll down a hill in the desert all week, are asking themselves where the Tesla Semi is? Perhaps instead of being excited about what likely would have been an aggressive timeline for the new $25,000 vehicle, traders are drinking a cold glass of reality about Musk’s three year timeline for the cheaper vehicle. Perhaps they are wondering where the $35,000 Model 3 is? And perhaps these same participants are asking themselves where the Roadster, Cybertruck, Full Self Driving and Solar Roof Tiles are, when they forked over deposits for them years ago.
Or maybe they recall that Musk already promised a $25,000 EV within 3 years – back in 2018 on a YouTube interview.
Regardless, the market didn’t seem to take to battery day where the theme was getting the cost of batteries down: “One of the things that troubles me the most is that we don’t yet have a truly affordable car, and that is something that we will make in the future. But in order to do that, we’ve got to get the cost of batteries down,” Musk said, in what appears to be admission that demand for the “cheap” Model 3 is waning.
The company said new “tabless” batteries and new materials inside its cells would allow them to “halve” the cost of their batteries, which would essentially put EVs on the same cost playing field as internal combustion engine cars. As the Verge notes:
The price per kilowatt-hour (kWh) is the unit of energy most commonly used to measure the capacity of the battery packs in modern electric vehicles. Those prices have been falling dramatically over the last decade, from $1,100/kWh in 2010 to $156/kWh in 2019, a drop of 87 percent.
Tesla is aiming to take packs that cost between $10,000 and $12,000 and reduce the cost to less than $6,000.
Musk also predicted Tesla could produce 20 million cars per year. That’s about twice what companies like GM and Volkswagen are producing currently.
At the company’s annual general meeting, which took place before the battery day event, Musk said he expected 30% to 40% growth in 2020. He also said: “The future is looking very promising from an annual profitability standpoint,” leading many to wonder if that was a tacit admission that a quarterly profit for the upcoming quarter is unlikely.
Recall, Musk proudly declared back in January: “Battery Day people. Wait until Battery Day. It’s gonna blow your mind. It blows my mind, and I know it!”
Judging by the stock reaction, minds were not blown.
We can’t help but wonder: if the Nikola fiasco hadn’t taken place what wild promises would have been made at battery day. Would a $25,000 vehicle have had a more aggressive timeline? Would deposits have opened up already?
Regardless, for a stock that is fueled almost exclusively by hype, today’s reality check – even despite the muted promises – may reverse what has been a truly historic ascent.
Go to Source
Author: Tyler Durden