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Tesla: Did Sparks Fly at Battery Day Announcement?

There are a few days out of the year that we all look forward to growing up. For some of us it’s birthdays, for others it’s Christmas. But after being dogged with constant delays the anticipation of both investors and sustainability advocates was finally relieve upon the arrival of Tesla’s highly touted Battery Day. After teasing news for the unveiling of a hitherto unseen commercial nanowire tech as well as a ‘million mile battery’ the actual reveal was in reality not as exciting, but still promises to shape the industry in the coming years. The Battery Day announcements included a range increase in future vehicles as well as a cost decrease at both the consumer and manufacturing levels. But what does this mean in the hands of Tesla? Why are investors so interested in the company and how did battery day align with expectations?

What Were the Battery Day Big Reveals?

1. An estimated 54% increase in range for Tesla vehicles

Musk revealed a new tabless battery system which will not only reduce vehicle weight but also increase power and driving range.

2. A 56% decrease in the cost of batteries, which will in turn make the cars cheaper.

Through a variety of methods spread throughout the manufacturing chain, Tesla aims to reduce the price per kWh by over half.

3. A New 2021 Model S Plaid which will retail for $139,990

The new Model S became available for pre-order immediately after the investment and will reportedly be capable of reaching 0-60 mph in less than 2 seconds. It will also have a range of 520 miles per charge.

4. A plan to release a car for $25,000

Thanks to all of the cost reductions in the building process, Musk revealed plans to release a car for as little as $25,000 at some point in the future.

5. A 69% reduction in investment per kWh of production.

At the production stage, Tesla aim to reduce investment costs by nearly 70%

6. No more cobalt in Tesla cathodes and recycling efficiency to increase

Not only has Tesla vowed to remove cobalt from their cathodes due to the multiple human rights issues that surround the mining of the element, but the company has laid out plans to increase recycling percentages for used batteries.

How Did Battery Day Measure Up to Expectations?

Although there were no groundbreaking announcements for the immediate future, it seems that Tesla is committed to create change. Whether or not they can deliver upon promises is another matter entirely. As significant change in battery structure or manufacturing will not, and simply cannot be seen for a number of years the only immediate change consumers saw was the release of a car which is priced at the cost of a small house. The jittery presentation skipped past some major reveals and Musk stumbled over points as the awkward rounds of honking from the crowd seemed to irritate rather than encourage the CEO.

Why is Tesla Important for Sustainability?

Although the company and its products at face value seem to be significantly contributing to a more sustainable future, this has been mired by the fact that the firm refuses to disclose information regarding corporate sustainability. Despite this lack of corporate transparency, according to Tesla’s 2019 impact report the EV monolith will continue to focus on reducing environmental impacts as it moves towards introducing “Sustainable energy ecosystem[s]” which encapsulate all elements of everyday life. It should also be noted that even though Tesla is moving towards more efficient battery recycling methods, the renewable energy sector as a whole still requires major improvements. As Tesla becomes more influential over the global battery markets, their shortcomings in reporting need to be addressed. Tesla must use their market cap in the EV market to catalyse dramatic change in the renewables industry for the future of sustainability.

Why Is There So Much Interest in Tesla?

In addition to developing exciting proprietary technology, Tesla has also made a number of interesting acquisitions, including its recent february purchase of Maxwell Technologies. With a focus on Maxwell Tech’s dry electrode research. Although Musk reiterated earlier this week that Tesla intends to increase battery cell purchases from outside sources to keep up with demand, this recent purchase could spell a future where Tesla is entirely self-reliant at the production stage.

Musk’s outlook on battery production. Accessed September 2020

Tesla is also one of the few EV producers who are getting close to providing a price parity with internal combustion engine (ICE) vehicles.

What Were The Market Impacts of Battery Day?

On 16th September Tesla was predicted huge forecasted gains by both Deutshe Bank and Credit Suisse, who raised their price targets for the company (NASDAQ: TSLA) to $400. The apprehension in the markets before the official announcement was made was clear however due in part to sentiments on Tesla’s ability to deliver a groundbreaking product.

Tesla’s share price over the last week. Quantopian.

During the presentation and following its conclusion the stock price trended downwards at most points in the after-hours market. As even long-term investors were put off by the scope for change being projected as far as the next decade. The lack of an exciting immediate reveal really dissuaded the markets leading to a finishing low of $395.08 from highs of $442.27 during the presentation. 

Analytics by Afia Allapitchai