Tesla Battery Day Is Coming–And It Could Be Bad News for TSLA Stock

Tesla will hold its Battery Day event later this month in a virtual gathering alongside its annual shareholder meeting.
Tesla, Elon Musk
Tesla's Battery Day won't be a cash grab for shareholders expecting the stock to go up. Here's why Tesla stock could decline after the event. | Image: Patrick Pleul/dpa via AP
  • Tesla will hold its highly anticipated Battery Day event later this month.
  • Elon Musk has already hinted at improved battery technology.
  • The Tesla stock may not necessarily benefit from this event despite the high levels of anticipation.

The Tesla Battery Day scheduled for later this month is one of the electric carmaker’s most highly anticipated events. Speculation is already high among Tesla bulls and fans on what CEO Elon Musk could end up revealing.

Whether it’s new battery technology or income streams, investors are drooling at the prospect of the stock rallying. That is not guaranteed, though, and the event could result in investors being worse off than they already are after a brutal selloff.

Here’s how it could go wrong for Tesla.

1. The Osborne Effect

The Osborne Effect refers to a social phenomenon that impacts the sale of current products after a company releases information on future products. In this case, the released information shows drastic advancements in technology, and so customers defer or cancel orders since the current products will soon become obsolete.

If Tesla announces a million-mile battery, for instance, sales of current cars could collapse as customers put off purchases until such a time when the superior technology is available.

Tesla
Announcements concerning drastic improvements in future products could reduce purchases of current products. | Source: @ev4all/Twitter

Why buy an EV with a 200,000-mile battery when you can wait for one with five times the lifespan?

2. Tesla Fails to Regain the Technological Lead

The number of new entrants in the EV space is growing by the day. While some of the new players are focusing on segments that Tesla does not currently participate in, some are going after Musk’s target market. Some of them are set to unveil products that rival or even beat Tesla’s current offerings.

Luxury EV startup Lucid Motors is, for instance, set to introduce a sedan this week that beats the Tesla Model S in both speed and range.

The Lucid Air sedan boasts a range of 517 miles on a single charge. This beats the range of 402 miles offered in the Long Range Plus Model S.

Tesla
After September 9, Tesla can no longer claim to have the fastest electric sedan boasting the longest range. | Source: @LucidMotors/Twitter

Rivian is another competitor that is well funded and using its so-called skateboard chassis–a combination of motors, drivetrains, and battery packs–to build and release vehicles faster. Another notable rival is Fisker, which is set to release an SUV with a solar roof.

If Tesla doesn’t reveal advancements that place it right back on the cutting edge of EV technology at the Battery Day event, it could be bad news for the stock.

3. Tesla Battery Day Delivers Neuralink-Like Hopium

Elon Musk’s best-known companies are SpaceX and Tesla. He also runs neurotech company Neuralink, which recently unveiled an underwhelming demo.

Billed as a presentation that would showcase breakthrough medical technology, it turned out to be basic brain surgery. Being the showman that he is, Musk provided timelines that many believe will be hard to meet.

Elon Musk
Elon Musk’s showmanship has reached legendary status. | Source: @techreview/Twitter

If Battery Day turns out to be another event like last week’s Neuralink, you can bet investors will not like it.

Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com. Unless otherwise noted, the author has no position in any of the securities mentioned.

Sam Bourgi edited this article for CCN.com. If you see a breach of our Code of Ethics or find a factual, spelling, or grammar error, please contact us.

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