Tesla's Battery Buffet

by Gill D on September 13, 2020

On Friday, Tesla boss Elon Musk stirred up some suspense with what was to be revealed at the EV carmaker’s Battery Day on 22 September.

“Many exciting things will be unveiled on Battery Day 9/22,” Musk wrote on Twitter.

The long-anticipated and often delayed event is finally set to take place with speculation that improved battery technology will be unveiled for its vehicles. “Battery Day” will be held with a few invited shareholders while broadcasting both the Battery event and the company's shareholder meeting via a live video feed due to the restrictions on gatherings for COVID-19.

The technology is expected to significantly increase the longevity of Tesla’s batteries. The upgraded battery cells could secure Tesla’s cost and technology lead for several more years. Tesla is also expected to provide details about its plan to manufacture its own battery. The project, called “Roadrunner,” would support Tesla’s plans to increase vehicle production. Some analysts have even cited the Battery Day event as a key reason to be bullish on the growth stock.

The event will be held after Tesla's annual shareholder's meeting on the same day. It's unclear what's stirring at Tesla, though Musk tweeted in August that more powerful batteries that could boost EV range weren't far away.

Responding to a Twitter thread about electric airplanes, Musk said batteries with 400-watt-hours per kilogram are likely to be mass-produced in the next three to four years. For reference, the battery used in Tesla's Model 3 is around 260-watt-hours per kilogram.

When Musk was in Berlin, Germany, earlier this month, he said the company's new factory in Berlin would feature "a bunch of innovative stuff," including "a radical redesign to the core technology of building a car." He went on to note that the company will unveil some of what they are working on in Berlin at Tesla's upcoming Battery Day. "It is going to be the first time that there will be a transformation of the core structural design of the vehicle," Musk added. "It's quite a big thing."

Meanwhile, there are rumors that the background image in Tesla's invitation to its Battery Day event may be teasing a new nanowire technology for batteries that could enable 50% higher energy density than standard lithium-ion batteries. 

Tesla's Battery Day event will be held at a site where the company purportedly plans to work on a secret battery project for a new battery manufacturing system. 
With a driving range of up to 402 miles on a single charge for Tesla's flagship Model S and up to 322 miles on its more affordable Model 3, the company's vehicles already have a meaningful driving range. Could new battery technology help Tesla push the boundaries even more?

Investors shouldn't forget about Tesla's nascent energy business, which consists of solar power and energy storage battery products. The company's energy storage business, specifically, could potentially benefit from battery chemistry improvements. The company deployed 419 megawatt-hours of energy storage capacity during the second quarter, driven by sequential growth in sales of its residential and commercial-scale battery-storage products. 

Long-term, Musk believes the company's energy-storage business can rival its automotive business. Investors, of course, should still view all of these product rumors as speculation. But if there are any game-changing announcements at Tesla's Battery Day event on 12 September, Tesla could further solidify its lead in the electric car market and fortify its position as a force to be reckoned with in the massive energy industry.

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