OK, the news isnâ€™t really all that bad. But Telsa (ticker: TSLA) bulls have been waiting for the battery technology day, hoping the event would act as another catalyst for the electric vehicle pioneerâ€™s stock. The reason for the delay appears to be, of course, the Covid-19 pandemic. But the bulls donâ€™t need to wait longâ€”the delays should only amount to a few weeks.
What investors are looking for at the technology day are new details about battery cost, life, range, and charging. The Holy Grail of the EV industry is an electric motor and battery pack that charges quickly, lasts a long time, and is as cheap to build as gasoline engines. Electric vehicles want to achieve cost parity with their gasoline-powered counterparts.
But battery technology is hard to understand, and that can be an obstacle for first-time buyersâ€”making events like Teslaâ€™s technology day all the more important.
General Motors (GM) tried to educate investors recently. The company hosted its own EV technology day outside of Detroit early in 2020, just before the country shut down with Covid-19. Wall Street was impressed by the technology display. But comparisons with Tesla or other EV technology providers is hard because EV statistics arenâ€™t part of the automotive vernacular yet. Everyone understands horsepower and miles per gallon. Whatâ€™s more, car owners know, roughly, how an engine will last and what gasoline costs.
The cost of maintenance is generally a mystery for first-time EV buyers as well. Electric cars, generally speaking, are cheaper to operate.
EVs are also better for the environment, from a greenhouse-gas perspective, than gas-powered vehicles. Electricity that recharges batteries generates the greenhouse gas, carbon dioxideâ€”just like a car burning gasoline. Utilities burn coal and natural gas to make electricity, but electricity comes from renewable sources such as wind and solar, too. Plus, utility-scale power generation is more efficient at converting fossil fuel into usable energy.
Aside from costs and carbon footprints, EVs already boast some impressive performance statistics. The Tesla Model 3 can accelerate from 0 to 60 miles an hour in 3.2 seconds. A similar BMW 3-Series can do it in 5.2 seconds.
For all of these reasons, bulls and bears shouldnâ€™t underestimate the importance of the coming eventâ€”batteries are a big deal. But as long as Tesla management convinces investors that battery costs are falling and range is improving, then Tesla shares can keep working.
No matter the outcome, the Tesla bull-bear debate always runs hot on Wall Street. Analyst price targets illustrate why: They range from roughly, $300 to $1,100 dollars a share. The $800 spread is about 100% of the current stock price. That is about twice as large as the average bull-bear spread for stocks in the Dow Jones Industrial Average.
Tesla doesnâ€™t trade like any stock in the Dow either. Shares are up more than 90% year to date, far better than the comparable drops of both the Dow as well as the S&P 500 over the same span.
Write to Al Root at firstname.lastname@example.org