Sep 23, 2020 (IAM Newswire via COMTEX) -- As expected, Elon Musk made some big announcements on Tesla's /zigman2/quotes/203558040/composite TSLA +2.05% Battery Day event and a drive-in movie/shareholders meeting. What Musk teased to be a 'very insane' development turned out to be a revolutionary battery but news also included eliminating cobalt use, a new Plaid powertrain for the Model S and a new cathode plant.
Most importantly, with the new battery technology, Tesla now has a new goal: a $25,000 car. The Battery Day was expected to ease threats from Tesla's upcoming competitors: Nikola /zigman2/quotes/208704275/composite NKLA -7.64% , Rivian, Hercules and Atlis. Atlis just announced a partnership with innovative tonneau-cover producer Worksport /zigman2/quotes/200413469/delayed WKSP +7.78% to enhance its tech-advanced electric truck with the TerraVis solar-charging system.
The EV game is heating up as traditional automakers such as General Motors /zigman2/quotes/205226835/composite GM -0.88% , Ford /zigman2/quotes/208911460/composite F +0.11% and Volkswagen /zigman2/quotes/204431732/delayed VWAGY -2.34% are also seriously upgrading their game for the electric era.
The key takeaway is that Musk aims to achieve a complete vertical integration and that would put Tesla ahead of any potential competitors.
Tesla currently gets its batteries from Panasonic Corporation /zigman2/quotes/202333059/delayed PCRFY +0.42% but in-house production has been on Musk's to-do list for quite a while. Back in 2018, Musk said Panasonic's pace slowed down Tesla's Model 3 and Model Y production. Tesla plans to manufacture its own batteries in the future. But, this battery will be "tabless" to improve the range and power of its vehicles. Being tabless means removing the tab that connects the cell and what is powering to make the battery up to six times more efficient and powerful by increasing the range by 16 percent. When it comes to range, every km counts.
The plaid powertrain also had its fair share of teases. But a plaid trim will cost more than other Tesla's offerings as it is currently listed for $139,990. It will be available in its Model S but by the end of next year.
On its quest to reduce supply chain costs and simplify cathode production, Tesla will build a plant for its batteries. Although the location is unknown, Musk mentioned back in July that Tulsa, Oklahoma would be considered for future projects. It came second after Austin, Texas that Tesla chose for its next Gigafactory.
Even though Tesla uses very little cobalt in its batteries, Musk already said in the past he wants to eliminate it entirely. Cobalt mining tends to violate human rights and it will become history for Tesla in the near-future.
The final goal is to bring the selling price of Tesla's models close enough to compete with that of traditional ICE vehicles so people can afford them. Reducing the cost of battery cells and packs is an essential step on this quest. But, this isn't the first time Musk made this promise as back in 2018, he already said a $25,000 EV will be possible within three years.
Affordability is key to scale and Tesla has laid a clear path towards producing an affordable EV. But a battery prototype never appeared during the event and it remained unclear what has Tesla actually achieved. Elon Musk only delivered a promise of a revolutionary battery, but not the battery itself. Its specs appear to offer large performance gains in a few key areas. But several hundred investors sitting in their Teslas from a makeshift stage in the parking lot of the Tesla factory in Fremont, California, left without knowing how far has Tesla gone in realizing these upgrades. All EV players are promising revolutionary developments, but none of them has seen the light of the day yet. We don't even know how well Tesla's new cell scored at performance tests.
Meanwhile, traditional automakers have well-established systems, expertise and legacy. Tesla has yet to pass the test of time. Investors were underwhelmed by only hearing promises for developments that are far-off in the future. As a consequence, shares dropped 6.8% in the extended session.
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