Battery Market Reaction Confounds Me

Firstly, I get that Tesla was likely slightly over bought leading into Battery Day (BD) and not knowing what was going to be revealed. And this was largely caused by a double shot from the stock split and the fact that BD was on the horizon.

But, the stock was already declining prior to BD, which says a lot of the momentum was more from the stock split than from BD expectations.

Either way, seeing the stock tumble after the event really confuses me. I see a lot of people speaking to disappointment about the lack of a reveal about some amazing new vehicle. But, in a good deal of ways what WAS revealed is FAR more important to Tesla's long term survival and dominance than another vehicle would be.

At this point Tesla has vehicles available in the largest segments of the market and a new vehicle would likely eat away at the market for their other vehicles. Which, isn't necessarily a bad thing.

And, in a meaningful way, it actually DID announce new vehicles in an indirect way. The new tabless batteries are estimated to be able to, within the same footprint, nearly double the range the of a vehicle. Or, at the same range bring costs down substantially. And both while bringing up the longevity of the batteries to and possibly crushing the objective of a million mile battery.

In summary, Tesla could use this battery tech within a few years to refresh it's product lineup. And this could either bring down costs substantially on existing models, or give them mileage which will utterly crush any ICE offerings without changing the price point. Or both.

In my opinion, shaving tens of thousands off the price of the car or doubling the range are effectively the same thing as releasing a new model. And buyers will see it that way as well. Existing EVs which introduced much higher range models saw much broader adoption than the earlier versions.

I doubt Tesla would create a car with too many battery configurations available (aside from locked by software). But, what IS likely is a hybrid approach; increase the overall battery capacity while also decreasing the physical footprint of the battery. This could allow Tesla to also reduce the battery weight in the car, in addition to production costs while adding back interior space, more efficiency and greater range. Let's say a target range of 800KMs+ while leaving the cost of existing models the same.

This would make their existing lineup both more attractive to consumers while increasing Tesla's profit margin. Which in turn would provide Tesla with funding to THEN pursue something like a $25k EV.

At the moment, Tesla doesn't have much impetus to announce new vehicles in my opinion. A new vehicle announcement might actually be problematic for a certain class of investor. Tesla is, after all sitting on two vehicles it has yet to deliver on; the Semi and Cyber Truck. I think they need to actually get those into mass production or officially kill them off before announcing new vehicles. 

And, I think this new battery cell technology is critical to both. Both are potential towing vehicles and need more energy density and throughput from the battery. And the new battery tech addresses both to some degree. If these new vehicles both need that new tech it would also put stress on supply hindering production of additional vehicles depending on it.

Lastly, there is of course the fact that this battery tech once again puts them FAR ahead of the competition and eliminates the value from gains they may have made against Tesla elsewhere.

So, I tend to see the BD announcement as smart. And, much more useful to Tesla. In my mind, the stock should have soared on these announcements. And, it does appear to be slowly rising again. We shall see where it goes.

But, ultimately, batteries are the foundation of any BEV and any company based around them. They are also the singularly most expensive component. So, an announcement which is tantamount to significant, across the board improvements in this area SHOULD be the single most incredible thing they could announce. How people aren't seeing this... I don't know.