Tesla Shares Drop After Investor Day Without Any New Models
Comment of the Day

March 02 2023

Commentary by Eoin Treacy

Tesla Shares Drop After Investor Day Without Any New Models

This article from Bloomberg may be of interest to subscribers. Here is a section:

“I’d love to really show you what I mean and unveil the next-gen car, but you’re going to have to trust me on that until a later date,” Franz von Holzhausen, Tesla’s design chief, said at the company’s headquarters in Austin, Texas. “We’ll always be delivering exciting, compelling and desirable vehicles, as we always have.”

Tesla shares fell as much as 8.6% as of 8:40 a.m. Thursday in New York, before the start of regular trading. Anticipation of the event contributed to a surge in the stock that added more than $300 billion of market value in two months.

Musk, 51, confirmed Tesla will build a new plant in Monterrey, Mexico, in what he said was probably the most significant announcement of the day. The chief executive officer said Tesla will make its next-gen vehicle there, and that the company will hold a grand opening and groundbreaking at an
unspecified date.

When asked when the carmaker will show a prototype and if he could share details about the size, content and performance of the vehicle, Musk responded that Tesla also will hold a “proper sort of product event” at some point, but didn’t say when.

“We’re gonna go as fast as we can,” said Lars Moravy, Tesla’s vice president of vehicle engineering. “We expect that to be a huge-volume product.”

Eoin Treacy's view

I watched most of the Tesla investor day presentation last night and was struck by how much the past tense was used. Everything was about the efficiencies that have already been implemented which is obviously already in the price. There was no Steve Jobs “just one more thing” moment. In fact the biggest takeaway for me was a statement Musk made about the future of battery chemistry.

He was talking about redesigning ships and planes so the battery is part of the hull. He said those are the only applications nickel will be used for in batteries. For everything else iron will be the predominant component. 

The problem with that statement is Tesla has spent a great deal of time and money developing its own battery from the ground up. The 4680 battery makes abundant use of nickel. Not only that but the manufacturing delays associated with producing the battery mean that, as of December, only 1000 a week were being produced. 

Meanwhile CATL expects to begin mass production of its sodium ion battery this year. It is already selling batteries to many automotive companies. Once this battery is available, the cost benefits will outstrip anything on the market today so companies that use it will receive significant advantages. CATL even supplies batteries to Tesla and I do wonder if that is a sign for the future.
Tesla continues to pause in the region of the 200-day MA and the medium-term downtrend is still intact.

CATL has been ranging for much of the last year as they spend to build manufacturing capacity. The share has clear scope to recover when sales begin. 

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