Investors Slashed $50 Billion From Tesla Market Value

Investors slashed $50 billion from Tesla Inc’s TSLA.O market cap on Tuesday. Despite the pledge of CEO Elon Musk to slash electric vehicle costs so dramatically that a $25,000 car that drives itself will be feasible, but not for at least three years.
As Musk and other Tesla executives outlined their new battery and manufacturing plans, Tesla’s market cap plunged $20 billion in just two hours after trading closed Tuesday. Shares closed down 5.6 percent and fell after hours by another 6.9 percent.
“Nothing Musk discussed on batteries is a done deal,” said Roth Capital Partners analyst Craig Irwin. “There was nothing tangible.”
At Musk’s often-touted “Battery Day,” investors anticipated two important announcements: the creation of a “million-mile” battery good for 10 years or more, and a clear cost reduction target — expressed in dollars per kilowatt-hour — that would potentially lower the price of an electric vehicle below that of a petrol car.
Musk neither offered. Instead, he vowed to cut battery costs in half with new technologies and processes over the next five years and produce an “affordable” electric vehicle.
“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 acknowledged that Tesla does not have the full completion of its ambitious new vehicle and battery designs and production processes. Tesla has often missed production targets established by Musk.
Eventually, Tesla hopes to be able to build as many as 20 million electric vehicles each year. The entire auto industry plans to produce 80 million cars worldwide this year.
Musk told an online audience of more than 270,000 that creating an affordable electric car “has always been our dream from the start of the business.”
A new Model S Plaid, a 520-mile range sedan that can hit peak speeds of up to 200 miles per hour (320 km per hour), was also unveiled by Tesla on Tuesday, with deliveries beginning in 2021. On Tuesday, Tesla’s website listed The Plaid at a price of approximately $140,000.

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