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Tesla's 'Battery Day', what to watch for

Yahoo Finance's Ines Ferre joins the On the Move panel to discuss Tesla's 'Battery Day'.

Video Transcript

JULIE HYMAN: It is the company's shareholders meeting today. But it's also-- it's Battery Day. And it's expected to perhaps make some announcements when that event begins later this afternoon. Our Ines Ferre has a preview.

So are we going to get some news about new cell batteries from Tesla?

INES FERRE: It's very likely a new battery cell that Tesla has been working on.

But just to back up for a second. The goal of Tesla and its battery development and R&D is really to get the cost of the batteries to come down, and by doing that, to get the cost of the vehicles to come down so that then they can be in line with gasoline vehicles and eventually lower than gasoline vehicles so that then you can have mass adoption of these EV vehicles. Some leaked-to-media images show a new battery cell that Tesla has been working on, and long-term, also, a manufacturing prototype system called Roadrunner.

Remember that Tesla has the Gigafactory that it's building in Austin, Texas. It's got the one that it's building in Berlin. It's got new vehicles coming out. It's got the Cybertruck coming out. Semis. So it needs a lot of batteries. And Elon Musk has said that its partners-- Panasonic, CATL in China-- it will be ordering more batteries with these partners. But still, they will need more because they will have a shortage by 2022 and beyond. That's why it's so important for Tesla to start making these batteries and try to make them at scale.

Now Elon Musk, yesterday, put in a little bit of a more realistic expectation on Battery Day, saying that what they will unveil, what we will announce-- he said we will not reach serious high-volume production until 2022. He also talked about the extreme difficulty at scaling production of new technology, saying it's 1,000% to 10,000% harder than making a few prototypes. He said the machine that makes the machine is vastly harder than the machine itself.

But what to look for today that analysts will be watching is-- bringing down the cost of those batteries, improvements, of course, on the batteries, that new battery cell that's expected, and also plans for mass production of them.

JULIE HYMAN: And what about mass production, not just for Tesla but for potential Tesla clients, as well? What do we know about the possibility of this becoming a more significant part of Tesla's business, not just as its own supply chain but maybe a supply chain for others?

INES FERRE: Of course. That is what analysts have been talking about so much is that we're not-- when you talk about Tesla and its vehicles, you also are talking about batteries and the battery technology. Remember that Tesla also bought this company called Maxwell that has a technology that's supposed to make the batteries faster, reduce the cost of manufacturing them, and increase the density. So it's been working on this battery technology.

Some people really look at Tesla as a battery company, as well. So it could eventually be making these batteries for other manufacturers. And that would, of course, increase adoption, as well. I mean, Elon Musk's goal is really to make these batteries to be so-- cost so low that then it can-- that this will be a mass-production adoption of electric vehicles.