Expectations Rise for Tesla's Battery Day
Tesla Inc's (NASDAQ: TSLA) highly anticipated Battery Day, where the company will reveal its developments in battery technology and hold its annual shareholder meeting, is just four days away. After already announcing many new developments, Elon Musk recently tweeted the day will be "very insane". Although superlatives are often used by Tesla's somewhat eccentric CEO, Tesla's mind-blowing performance throughout 2020 does suggest that the company could deliver something revolutionary.
The value of the million-mile battery
High energy density and million-mile batteries will accelerate the adoption of EVs and therefore accelerate our path to a net-zero transportation emissions future. Although drivers will never need anything close to a million miles, a battery with 4,000 cycles before seriously degrading will put worries about dead batteries to rest. The real value is its underlying durability, which enables tangible benefits like fast charging, longer range, smaller sizes, and lower costs. However, the million-mile lifespan will be important to buses, taxis, fleet vehicles, and renewable energy storage where daily depletion of the battery and low cost of ownership, necessitate it.
Environmental sustainability
Tesla could also reveal its actions to improve the environmental sustainability of its supply chain. One of the major concerns about EVs is the impact of mining as well as the recycling of batteries. The whole idea of EVs is for them to be clean, not to just shift emissions and waste from streets to plants. Redwood Materials, a battery recycling startup created by Tesla's former CTO, is among the first companies to win investment from Amazon.com's (NASDAQ: AMZN) $2 billion Climate Pledge fund created in June. Its aim is to back companies with technology contributing to carbon reduction efforts. JB Straubel left Tesla in July last year, which was quite a surprise for investors as even Musk admitted there would be no Tesla without him. Out of the five original founders, only Musk still has an active role. Now, Redwood will help Amazon recycle electronic components, electric vehicle, and lithium-ion batteries. What will Tesla have to say about the elimination of e-waste?
Competition is heating up
While Tesla appears to be far ahead of other EV makers in terms of autonomy and battery technology, it may face challenges in the future as traditional carmakers board the electric train along with many new disruptive startups. Among the companies competing with Tesla is Rivian, which is set to produce an electric truck and was among the first recipients of Amazon's above fund. Rivian received $440 million in direct investment last year in addition to prior investments, as well as an order to supply Amazon with 100,000 electric delivery vans by 2030. Tesla has tremendous R&D power, but it will still be very challenging for them to shift their EV battery platform in response to newer designs from both established and emerging EV makers (especially if they join forces, such as Nikola (NASDAQ: NKLA) and General Motors (NYSE: GM)). Whatever Tesla comes out with on Battery Day could help the electric pioneer reduce the risk of this competitive threat in the eyes of its investors.
September 22 could go down in history
If Tesla shows great improvement in clearing the blocks to mass EV adoption, it will be a massive step towards a carbon neutral future. Analysts are using phrases like "major milestones" and "mind-blowing" to describe the event for a reason, as its developments could be monumental to the future of EVs.
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