Tesla is working on cheaper, more powerful batteries for its electric cars, but many of the innovations required are still in the works, its managing director Elon Musk said Tuesday at an anticipated presentation at the company's California plant.
The advances could ultimately cut battery costs by more than 50 percent and increase the distance Tesla's vehicles can travel by almost as much. That would set the stage for the company to produce a "compelling" $ 25,000 electric vehicle in three years, Musk said, speaking to a parking lot full of Tesla owners in their vehicles.
But Mr Musk, who has a reputation for promising breakthrough innovations that often take much longer than expected or never arrive, said the company hasn't made the advances it needs to get to that point.
Investors were hoping that Mr. Musk would herald a major technical breakthrough, due in part to the way Tesla had organized the Tuesday event known as Battery Day. Tesla's stock fell about 7 percent in expanded trading on Tuesday afternoon, after falling more than 5 percent in regular trading.
In anticipation of the presentation being created over the past few days, Mr Musk tried to temper expectations, posting on Twitter on Monday that the battery's announcement would affect long-term production of Tesla's vehicles, including some that have not yet been launched but were not introduced to have an immediate impact on his business.
He also said that despite pressure from battery cell suppliers Panasonic, LG and CATL to move "at maximum speed", Tesla expected a battery shortage by 2022.
The company is testing battery production at its Fremont, Calif. Car factory and plans to build a cathode production facility somewhere in North America, Musk and Drew Baglino, senior vice president of powertrain and power engineering, said at the event.
"It bodes well for the future and means that the long-term scale of Tesla and the sustainable energy products we make will be massively increased," said Musk.
Battery efficiency is central to success in the electric car market. The cost of batteries is typically the single largest cost in making such cars. A vehicle's range – the distance it can cover on a single charge – is of vital importance. A longer range means fewer worries about finding a charging station.
Tesla has an advantage for now. The company's Model S Long Range Plus can complete a 400-mile drive without charging. This is much further than electric cars from traditional automakers like Audi, General Motors, and Jaguar. Lucid Air, an up-and-coming rival led by a former Tesla engineer, says he developed a car that can travel more than 500 miles on a single charge.
Mr Musk said Tuesday that customers could order a new version of Tesla's flagship sedan, the Model S Plaid, which is expected to ship as early as the end of next year. The vehicle has a starting price of nearly $ 140,000 and claims to travel 520 miles with a single charge.
Mr. Musk and Mr. Baglino formulated the race to build a cheaper, more energy-dense battery as more than a corporate goal. You said it was an important tool in the fight against climate change.
With battery prices falling, the electric car market is growing faster than expected, and other companies are working hard to catch up with and beat Tesla.
Lucid claims that advances the company has made in shrinking critical parts like engines and other improvements, including cooling critical components, can keep its Air sedan running on a charge. G.M. has developed modular battery packs and improved battery chemistry that he believes will reduce costs and increase the range of its electric vehicles over the next few years.
Despite these competitive threats, Tesla has had a remarkable year. The share price has increased more than eightfold since it posted a quarterly profit last October. And the company has since maintained profitability even as the pandemic hit the auto industry from April to June.
The company has slightly dominated the electric vehicle sales business. Mr Musk said Tuesday that Tesla will increase car deliveries by 30 to 40 percent this year, despite being "the toughest year in Tesla's existence."
At Tesla's annual general meeting just before the battery was unveiled, Mr. Musk said Tesla expects to release a private beta of its fully functional feature "in a month".
"It will just clearly work," he said.
Mr Musk had previously predicted that this year Tesla would have a fleet of driverless taxis on the road, a destination it has not yet reached.