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Tesla Battery Day: Here’s What to Expect

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The highly anticipated Tesla Battery Day is just 2 days away. CEO Elon Musk has taken to Twitter and confirmed that “many exciting things will be unveiled”.

Tesla’s disruption of the automotive market suggests that Battery Day is set to be a watershed moment in the history of the auto industry.  

Tesla is already by far the most valuable auto manufacturer in the world by market cap. As of 1st of September, the company was valued at $442.7 Billion. Tesla surpassed Toyota last June and has not looked back since. 

Investors, Wall Street Analysts, Scientists and car enthusiasts will be closely monitoring the event. All parties expect the unveiling of major technological advances that will cement Tesla’s position as the leading EV manufacturer. 

Two Simultaneous Events 

Tesla already confirmed that Battery Day and the company’s annual shareholders meeting will take place the same day. 

Both events are set to be webcast at 4:30 p.m. EDT. 

A Million-Mile Battery To be Unveiled?

Back in 2019 during Tesla’s Autonomy Event, Tesla CEO Elon Musk stated that EVs need to be durable in terms of economic viability. 

Musk opined that the vehicles should be “tested and validated for 1 million miles of operation”. The entrepreneur admitted that current battery packs are not built to last that distance.

At the moment, Tesla’s best performing models have a single-charge battery range of 402 miles. Additionally, these models have a total lifespan that range between 300,000 and 500,000 miles. 

Assuming that Tesla will introduce a million-mile battery pack, beneficiaries will obviously be average EV users. Having such a battery pack translates to longer battery life, longer range and lower maintenance costs.  

However, perhaps the biggest winners will be long-haul trucks, freighting, taxi and vehicle-for-hire companies. Tesla relies on Lithium-Ion batteries in terms of vehicle production. They are rechargeable batteries that are commonly used in the EV industry. 

Current Li-Ion battery packs may be more than enough for most standard EV owners. On average, they use less than a quarter of their battery charge per day. 

The lifespan of these battery packs are not viable from an economic standpoint for the aforementioned companies.

In 2019, average truck drivers drove between 285 and 430 miles per day. This translates to between 100,000 and 150,000 miles per year.  

As a result, these companies will drastically reduce their maintenance and transportation costs.

Introducing this battery pack will also create a price parity between EVs and their internal combustion engine counterparts.  

In other words, we are not talking about anything less than a full-scale industrial revolution.  

Single Crystal Cathodes = Better Battery Cell Quality

Tesla has a battery research team based in Canada. Tesla filed a patent for a new NCA electrode that could be used for the company’s battery cell production.

Lithium Nickel Cobalt Aluminium Oxide, is a class of electrode material that is used for the production of lithium-ion batteries. 

Tesla’s patent states that the use of NCA electrodes reduces contaminants in battery cells, leading to their increased lifespan. 

Tesla-made vehicles will also be better suited to ultra-fast charging. As a result Single Crystal Cathodes will constitute a cost and time-efficient solution for EVs.

Tesla Battery Day September 22, 2020

Battery Day = Another Bull Run for Tesla Shares?

The event has been touted as Tesla’s next catalyst for a skyrocketing stock price. Several analysts subscribe to that statement.  

Deutsche Bank analyst Emmanuel Rosner boosted his price target on Tesla’s stock by 33% to $400. Rosner argued that Tesla could unveil a “new insourced manufacturing system” to boost battery capacity and improve cell quality. 

In a note to clients, Rosner stated the following: “While media and investors’ expectations for the event are high, we believe these announcements could meet many of them, and reinforce Tesla’s position as a technology leader.”

A price target is a price at which an analyst believes a stock to be fairly valued. The analysts make a stock price estimation based on historical earnings, and the company’s performance.

Crédit Suisse analyst Dan Levy also increased his price target for Tesla stock from $280 to $400

Levy stated that Battery Day is expected to yield positive results on battery capacity, reliability, range and technology.

Alex Potter has the most bullish outlook regarding Tesla. The Piper Sandler analyst bumped his price target from $480 to $515 per share. Potter expects Tesla’s energy business to exceed $200 billion a year in revenues in the near future. 

Our Take

Many experts and analysts have said numerous things about Battery Day. Tesla has an opportunity not to dominate the automotive industry, but to initiate a new energy order. 

The push towards sustainable and environmentally-friendly solutions is already in full-swing. Climate change and the COVID-19 pandemic have enabled the clean-energy industry to gain momentum.  

After Battery Day, Tesla could find itself at the forefront of that ongoing seismic shift!

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