The event is a big deal for the stock. It will shape investor opinions about the future of electric vehicles and Tesla’s technological lead. To prepare for Tuesday, investors can divide likely topics into a few categories: battery cost, battery reliability, and battery capacity. New battery technologies should also discussed. And investors should also be ready to hear about stationary power, which includes Tesla Powerwall business.
Costs are a big deal for all EV makers, including Tesla. Historically, electric vehicles have been more expensive up front than comparable gasoline powered models. That is, essentially, because high-tech batteries cost more than a gas tank.
Battery costs are falling. Some industry insiders tell Barron’s costs are down 75% over the past 10-years. The cost bogey today is for battery cells to hit $100 per kilowatt-hour.
Credit Suisse analyst Dan Levy thinks Tesla’s event will focus on cost reduction, potentially offering $75 per kilowatt-hour. Cost reduction “can help unlock sales at lower price points and thus fuel further growth,” writes Levy in a recent research report. He rates shares the equivalent of Hold and has a $400 price target for the stock.
Morgan Stanley analyst Adam Jonas also rates shares the equivalent of Hold. His price target is lower, however, at $272 a share. He asks in his event preview report, “could Tesla communicate plans …to target $50 per kilowatt-hour?” That’s the lowest battery cell cost target Barron’s has seen in a Wall Street research report. (Jonas’ preview note, by the way, is the one with “mind blowing” in the title.)
Anything below $100 per kilowatt-hour, along with a credible plan to get there, should be a win for Tesla shareholders.
Wedbush analyst Dan Ives thinks a million mile battery will be “front and center” on Tuesday. That’s a battery that can last a million miles through all the charging cycles. A battery like that would last longer than the car body and open up reuse and recycling opportunities. Battery re-use is another factor in cost reduction.
Ives rates shares Hold and has a $380 price target for the stock. New Street Research analyst Pierre Ferragu also rates shares Hold. His price target is $300 a share.
Ferragu has a different opinion on the million mile battery. He thinks it is irrelevant to the long-term success of Tesla. Other auto makers can achieve the same thing so he believes battery reliability won’t help Tesla differentiate itself versus its competition in the long run.
Ferragu, instead, thinks Tesla’s secret project “Roadrunner” could be big. Roadrunner is an internal project, apparently designed to improve all aspects of battery design and manufacturing.
Read More News: Tesla Battery Day Will Be “Mind Blowing.” Here’s What to Expect.