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Fasten your seatbelt, because Tuesday is Tesla\u2019s \u201cBattery Day\u201d, and some investors expect chief executive Elon Musk\u2019s pitch on the electric car maker\u2019s energy storage advances to re-energize its rally following a recent 21% stock slump.<\/p>\n
Tesla\u2019s stock has risen in recent sessions ahead of the event scheduled for Tuesday after the close of trading. Many analysts expect Musk to unveil battery improvements extending the Palo Alto, California automaker\u2019s lead over General Motors, Volkswagen and other rivals.<\/p>\n
Tesla options are pricing in a stock move of around 17% – up or down – by Friday, said Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group. <\/p>\n
Tesla\u2019s stock has more than made up for a historic slump on Sept. 8 after it was unexpectedly left out of a group companies joining the S&P 500, and it has surged over 400% year to date. Still, Tesla remains below its Aug. 31 record high close.<\/p>\n
Analysts, including those with neutral ratings on Tesla\u2019s stock, expect major advances from Musk.<\/p>\n
\u201cWe (and the market) expect the announcements to be significant, cementing Tesla\u2019s cost and technology lead for several more years,\u201d UBS analyst Patrick Hummel wrote in a client note on Sept. 11, adding he expects a new dry electrode cell technology to help speed manufacturing and lower costs.<\/p>\n
Batteries make electric cars cost more than gasoline-powered ones, so the ability to produce low-cost, long-lasting batteries could put Tesla cars on a more equal footing and help usher in mainstream acceptance.<\/p>\n
Musk in August suggested on Twitter that Tesla may be able to mass produce batteries with 50% more energy density in three to four years, which could even enable electric airplanes.<\/p>\n
A much hyped \u201cAutonomy Investor Day\u201d in April last year failed to stop a five-month decline in the company\u2019s stock. At that 2019 event, Musk said that Tesla robotaxis with no human drivers would be available in some U.S. markets in 2020, continuing a habit of making bold pronouncements and setting deadlines Tesla does not meet.<\/p>\n
\u201cEven if Tesla provides overly ambitious aspirations at Battery Day, we nevertheless expect the event to reinforce Tesla\u2019s long-term growth narrative \u2013 central to the stock, while also reinforcing investor perception that Tesla is ahead of other automakers,\u201d wrote Credit Suisse analyst Dan Levy in a Sept. 16 research note.<\/p>\n
New battery cell designs, chemistries and manufacturing processes are just some developments that would allow Tesla to reduce its reliance on its long-time battery partner, Japan\u2019s Panasonic.<\/p>\n
Cowen analyst Jeffrey Osborne said in a recent client note he expects Tesla to announce it is bringing battery cell production in-house, and for Musk to focus on work done on \u201cmillion mile\u201d batteries. <\/p>\n
Eight Wall Street analysts recommend buying Tesla\u2019s stock, while 10 recommend selling and another 15 are neutral. The median average price target is $305, which is 31% below Friday\u2019s close.<\/p>\n
Underscoring many investors\u2019 concerns that Tesla\u2019s stock has become overvalued, it is trading at about 150 times expected earnings over the next 12 months, about double its five year average, according to Refinitiv.<\/p>\n
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