Tesla just changed the game with Battery Day but Wall Street is still disappointed

With its Battery Day event, Tesla (NASDAQ: TSLA) effectively changed the electric car game by outlining a roadmap towards an annual capacity of 20 million vehicles and a manufacturing volume of 3 TWh of battery cells by 2030. Undoubtedly, that is amazing, and it offers great insight into what is to come for Tesla’s electric vehicles and energy storage systems. Yet, amid all these game-changing announcements, it seems to disappoint TSLA and Wall Street traders.

A look at reactions following the highly awaited event from Wall Street analysts, traders, Tesla critics, and battery experts reveals that Battery Day has received a polarizing response at best. This is best reflected by the views of Simon Moores of Benchmark Mineral Intelligence and Dr. Ying Shirley Meng, a battery researcher and professor at the University of California, two individuals who are among the most experienced in battery technology.

Dr. Meng praised Tesla for its new cell format, silicon anode, its diversified cathode material options, and recycling initiatives, to name a few. On the other hand, Moores noted that the event was “more fantasy and incorrect statements than reality.” Dr. Meng noted in a later tweet that it’s always an easier job to criticize than to execute and deliver.

Wall Street appears to have been broadly disappointed with the event, with TSLA stock plunging on Wednesday’s intraday by up to 9 percent was partially due to the “letdown” of Battery Day as was reported by Bloomberg. A notable part of this letdown was the fact that the innovations outlined in the event were due to be implemented within the next few years, as noted by Roth Capital Partners analyst Craig Irwin. “Nothing Musk discussed about batteries is a done deal. There was nothing tangible,” he said. 

UBS analyst Patrick Hummel took a more neutral approach, although he also noted that TSLA would likely be negatively influenced by the high expectations for the event. “Given the high expectations into the event, we think the market will initially respond negatively to the relatively long timelines of the innovations and the lack of granularity,” Hummel noted.

Long-time Tesla bull Gene Munster noted that TSLA investors may demand substantial developments in a shorter timeframe than those announced at Battery Day. “The challenge with the stock is that everything they are talking about is three years away. I think traditional auto is in an even tighter spot, but Tesla investors want this tomorrow,” said Munster.

This is not the first time that a negative trend in TSLA stock has been confronted by a major technical presentation. Autonomy Day last year was also followed by a steep dive in TSLA, and for a lot of the same reasons. For addressing technology that is yet to come, Tesla’s Autonomy Day faced some criticism, much like how Battery Day is now being criticized for highlighting technologies that are not yet being introduced in the vehicles of the company today.

However, given the disappointing reactions to Battery Day, the reality remains that Tesla’s upcoming projects on battery design and manufacturing front may very well pave the way for the company to achieve its ambitious objective of accelerating the transition to renewable energy worldwide. After all, the event not only displayed the design of the next-generation 4680 cells from Tesla, it also explained how the company could transition from manufacturing batteries at the level of ‘Giga’ to the level of ‘Tera’. Significant cost savings were also addressed on the battery front, which could result in Tesla eventually launching a $25,000-priced vehicle with acceptable performance and Autopilot.

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