Tesla shares hit the skids after 2020 Battery Day underwhelms
By Alexander Bueso
Date: Wednesday 23 Sep 2020
(Sharecast News) - Shares of US stockmarket darling Tesla were on the skids after the outfit underwhelmed investors at its 2020 Battery Day.
The electric vehicle manufacturer did outline promising new technologies that would help it deliver lower the price tag on its sedans below those on their gasoline-fuelled competitors - but not as quickly as some had hoped.
A projected 56% reduction in the US dollar cost per Kilowatt-hour from its batteries, 54% increase in range and for a $25,000 mass-market automobile would take roughly three years, the company told investors.
"News flow from the event was positive as expected, but we believe is unlikely to drive a material short-term move in the stock, given already significant hype behind the company," analysts at Bank of America said.
Analysts at the broker also labelled Tesla chief, Elon Musk's, long-ter goal of achieving annual unit sales of 20m as "remarkably lofty", pointing out that such volumes would be twice the highest figure ever reached by the largest manufacturer.
Tesla also presented its plans to become a completely vertically integrated firm, running all related operations in-house, from mining to battery design.
Some market commentary however was quick to point out that while such a structure would yield higher profits, it was one of the hardest tricks to pull off.
"Simply put, in our view TSLA is a new disruptive (auto) company that may or may not be dominant in the long-term, but that does not matter as long as it can keep funding outsized growth, with almost no cost capital driving capacity expansion, which justifies a high stock price, in our view," BofA said.
"We maintain our Neutral rating."
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