Tesla is gearing up for Battery Day, an event next Tuesday where the electric vehicle maker will show off the capabilities of its newest battery. Rumors are already swirling about innovation announcements, like a potential “million mile” battery that could keep a car running for, well, a million miles. But Tesla founder Elon Musk is no stranger to over-promising. So while the event could mark some big, innovative announcements, it may be little more than a PR celebration to rally stock prices. Here’s what you should know about the event.
Sparking Wall Street Enthusiasm
Several Wall Street speculators think that, whatever Tesla founder Elon Musk reveals at Battery Day, the event will be a catalyst for the automaker’s rising stock.
Deutsche Bank analyst Emmanuel Rosner, for one, has already boosted his price target on Tesla stock by 33%. Anticipating enthusiasm after Battery Day, Rosner’s target now sits at $400. The analyst predicts that Tesla could unveil “a new insourced manufacturing system” to increase its battery capacity. Additionally, he suspects the announcement of improved cell chemistry, and “fast declining” battery prices. This is all to say that at least one speculator thinks that battery-powered Teslas are about to become much more affordable. If this turns out to be true, Battery Day could cause Tesla shares prices to soar, in a year where shares prices have already increased by 400%.
Promising the Moon?
Of course, Musk has been known to over-promise and under-deliver. Just last April, Tesla held an entire event dedicated to the company’s autonomous vehicle hardware. The presser talked-up Tesla’s path to completely self-driving cars, advertising a fleet of “robo-taxis” that would be available by 2020. But no such fleet has come to fruition. And, in fact, it’s been four years since Musk made his first claims about Teslas that require no human driver. The company has yet to release any such prototype.
As such, Chris McNally at the investment firm Evercore ISI has forewarned other speculators not to take Musk’s loftier promises too seriously. “We caution investors against diving head-first into any claims that are ‘years’ away,” McNally commented. Instead of getting too excited about long-term potential, McNally encourages investors to focus on near-term performance metrics, like battery density, efficiency, and cost. Such near-term innovations are more likely to impress Wall Street, and maintain Tesla’s status as the world leader in EV technology.
Either way, Battery Day will be another opportunity for Tesla to show its forward motion. Despite some setbacks due to the coronavirus pandemic, the EV giant keeps speeding along.