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Elon Musk Says Tesla’s Cheaper Battery 3 Years Away, Firm Loses $50B In Market Cap

Elon Musk Says Tesla’s Cheaper Battery 3 Years Away, Firm Loses $50B In Market Cap
United States listed electric car maker Tesla lost $50 billion of its market value on Tuesday with investors losing confidence despite company C EO Elon Musk pledging to radically cut down on costs of electric vehicle making possible a $25,000 car that drives itself but after at least three years.
After trading closed on Tuesday, Tesla's market capitalization dropped $20 billion in just two hours after their new battery and manufacturing strategies their new battery and manufacturing strategies were presented by Musk and other Tesla executives.
"Nothing Musk discussed about batteries is a done deal," said Roth Capital Partners analyst Craig Irwin. "There was nothing tangible."
At the Musk's oft-touted "Battery Day", two significant announcements had been expectd by investors. The first was on concrete information about the development of a "million mile" battery that would hold good for 10 years or more while the second as specific target for cost reduction which is expressed in dollars per kilowatt-hour so that it helped to finally drop the price of an electric vehicle below that of a gasoline car.
Neither of the two expected announcements were made by Musk.
Musk instead pledged to cut prices of batteries over several years by 50 per cent with the use of new technology and processes and the promise to come out with an "affordable" electric car.
"In three years . . . we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car," Musk said.
Musk also acknowledged that the new vehicle and battery designs and manufacturing processes that it has previously talked about were not yet complete. Production targets set by Musk have frequently been missed by Tesla.
According to Tesla, the company will eventually be able to churn out as many as 20 million electric vehicles a year. In comparison, the whole of the global auto industry expects to build about 80 million cars globally.
Addressing an online audience of more than 270,000, Musk said that building an affordable electric car "has always been our dream from the beginning of the company".
Descriptions of a new generation of batteries that will be more powerful and last longer and will cost half as much as the current batteries used by the company were given by Musk which he hoped would help drive down vehicle cost.
Musk said that five times more energy, six times more power and far greater driving range will be provided by the company’s new larger cylindrical cells, and added that it will take about three year for the company to attain full manufacturing capability of the new cell.
While reducing the use of cobalt - one of the most expensive materials used in batteries, to virtually zero, Tesla is also planning to recycle battery cells at its Nevada "gigafactory", Musk said. The company also plans to start manufacturing its own batteries at several highly automated factories around the world, he added.
Following the announcement, share in two of the battery suppliers of Tesla - South Korea's LG Chem and Japan's Panasonic Corp, also fell in their respective markets.

Christopher J. Mitchell

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