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Elon Musk sees no instant boost from Tesla's 'Battery Day' tech unveil

TESLA Inc TSLA.O CEO Elon Musk said that changes to be announced at the “Battery Day” event of the electric vehicle manufacturer will not enter “significant high-volume demand” until 2022, knocking down their shares.
Analysts expected Musk to reveal plans for Tesla to manufacture its own battery cell at the event as it aims to cement its lead over GM.N, Volkswagen VOWG-p. DE and others from General Motors.
But in a post on Twitter ahead of the Tuesday event, Musk said: “This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.”
Tesla expects major shortages in 2022 and beyond, Musk cautioned, adding it planned to increase cell purchases from Panasonic 6752.T, South Korea’s LG Chem 051910.KS, China’s CATL 300750.SZ, and probably other partners.
LG Chem and CATL shares rose after the remarks.
“Battery firms believe it is not easy to mass produce batteries. It took them a lot of time … how can Tesla do it overnight?” a South Korean battery industry source told Reuters.
But in extended trading, Tesla shares declined more than 5% to $425.50 as the tweets cast doubt about whether Tesla will soon be able to manufacture its own batteries-a question shared by analysts and industry officials.
At its Fremont plant, Tesla is working to manufacture new, larger battery cells, two people familiar with the matter have told Reuters.
“Tesla is sending signals to suppliers that they should further lower costs, and if not, Tesla would source more batteries in-house,” a former LG Chem official said.
The new cells will have a diameter of 42 mm, against the 21 mm ones made at its joint battery factory with Panasonic that are used in Model 3 sedans, the people said. In order to mass-produce its own cells, Tesla may have to partner with Panasonic, said Seoul-based battery expert Park Chul-wan.
The new batteries will increase energy capacity , reduce costs and allow faster charging, helping Tesla cars compete better with petrol cars, Park said.
Some battery industry officials are wary that Tesla ‘s move to produce batteries in-house could put pressure on prices.
Tesla could also unveil its “million mile” batteries at the case, which it is developing with CATL and are expected to have a much longer life: the equivalent of 1 million miles or more, compared to around 500,000 miles now.

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