Tesla Battery Day – Fluff-free

Lack of fluff underpins credibility.

• The lack of fluff and hyperbole on display gave Tesla much better credibility that the advances it announced in its battery technology are real and will be delivered within the stated time frame.
• This in stark contrast to the autonomous driving day (see here) where unrealistic claims about autopilot’s ability, timelines and a robotaxi business model that does not hold water were touted.
• Battery day was a far more muted event where progress and plans were announced that look both realistic and achievable in the time frame offered.
• Instead of a new battery that can go for a million miles before needing to be replaced or some other quantum leap, the announcements were realistic and incremental.
  • First, range: the new battery technology which Tesla will move in-house will offer a 16% increase in range with no data being given around the expected lifetime mileage.
  • Battery technology moves notoriously slowly and given that this is the result of some years of work, this looks reasonable to me.
  • Second, cost: By removing cobalt from the manufacturing process, manufacturing in house and using a new cathode design, Tesla aims to make the batteries substantially cheaper to make than they are today.
  • The aim here is to make electric cars no more expensive to purchase than their petrol equivalents in the same category and trim level.
  • This has long been a requirement in my mind to see electric vehicles really fulfil their potential and become a much larger share of the market.
  • The ultimate aim is to produce a $25,000 vehicle which given that the average vehicle price in the USA is around $40,000, puts it squarely in the mass market category.
  • This statement has been made before but the changes to batteries announced today will really help Tesla get close to that goal.
  • Third, new drivetrain: The Plaid drivetrain has been teased for some time, but this now has some specifications and a timeline.
  • The super-sporty drive train will offer a range of 520 miles, an incredible 0-60mph in under 2 seconds and a top speed of 200mph.
  • It is worth noting that with that kind of acceleration, the extra range will be badly needed as nothing kills electric car battery range like hard driving.
  • The price for this in the Model S will be $140K which is extremely competitive when one considers what one has to pay for a petrol vehicle with that kind of performance.
  • For example, the stunningly beautiful Bugatti Chiron does 0-60mph in 2.3 seconds but costs at least $3m.
  • I think this will prove to be a popular choice given that this drive train will provide pretty much the fastest street-legal vehicle available.
  • This will be available in the Model S at the end of 2021.
• There was nothing here to shock and awe anybody which is why the press has pretty much ignored this event.
• However, it does show that Tesla is continuing to push the boundaries of electric vehicle technology which combined with a substantial turnaround in its financial performance ensures that it will be a major player in the next generation of vehicles.
• However, once again, we come to the ludicrous valuation of Tesla.
• It has improved a lot in the last 12 months but there is no way that the company is worth more than all of the other automakers in the world combined.
• Tesla shares are driven by sentiment and hype and have no connection with reality whatsoever.
• Anyone in should sell and anyone not in should sit back and watch its inevitable collapse to a more rational level.