Elon Musk says Tesla deliveries will rise 30% to 40% in 2020, touts new battery tech
- At Tesla’s 2020 shareholder’s meeting, Tesla CEO Elon Musk said that the company’s vehicle deliveries in 2020 would be up 30% to 40% from last year, a range that encompasses its previous prediction of 500,000 cars delivered this year.
- The meeting took place before Tesla’s “battery day,” where Musk and executive Drew Baglino talked about the company’s plans to make its own batteries, which should lead to cheaper, more efficient vehicles.
- Musk, who is well-known for exuberant promises, also predicted the company will be able to make a $25,000 full self-driving car within three years.
Tesla CEO Elon Musk said on Tuesday he expects vehicle deliveries to increase by 30 to 40 percent over last year, when the company reported deliveries of 367,500 vehicles. The new guidance from Musk implies deliveries of between 477,750 and 514,500 cars, a range that encompasses the company’s previously stated goal to deliver half a million cars in 2020.
Musk offered the updated numbers during the company’s 2020 shareholder’s meeting on Tuesday afternoon, which was accompanied by a presentation about Tesla’s battery advances. After thanking Tesla owners for their word-of-mouth marketing, he noted:
“In 2019, we had 50% growth. And I think we’ll do really pretty well in 2020, probably somewhere between 30 to 40 percent growth, despite a lot of very difficult circumstances.”
Musk, who is famous for being overly optimistic on such matters, said the battery and manufacturing advances Tesla is working on will soon lead to lower prices, which will be vital for getting more electric vehicles on the road. “About 3 years from now, we’re confident we can make a very compelling $25,000 electric vehicle that’s also fully autonomous,” he claimed.
In response to one shareholder’s follow-up question about pricing, Musk acknowledged, “It’s not like Tesla’s profitability is crazy high. Our average profitability for the last four quarters was maybe 1%. It’s not like we’re minting money. Our valuation makes it seem like we are, but we’re not.”
He continued, “We do want to make the price as competitive as we can without losing money. If you keep losing money, you’ll die.”
The company’s shares dropped as much as 7% during the presentation, which took place after normal trading hours.
Battery improvements promised
During the “battery day” portion of the presentation, Tesla confirmed that it is making its own battery cells at a facility in Fremont now. Musk also confirmed that Tesla plans to manufacture battery cells at its factory now under construction, in Grünheide, Germany.
Joining Musk on stage, Tesla’s senior vice president of powertrain and energy engineering, Drew Baglino, described the new cells as a “large tabless cell,” with a “shingled spiral” design. The cells are larger than the ones Tesla purchases from Panasonic and other suppliers, and offer “thermal benefits” which make them appropriate for use in electric vehicles.
Baglino said battery, manufacturing and design changes underway at Tesla would eventually “unlock” a 54% improvement in the range of the company’s vehicles.
Near-term, Tesla says it aims to produce 10 gigawatt hours worth of its new battery cells at its pilot plant within a year. Musk noted that whatever cells it produces in Fremont would be supplemental to 100 gigawatt hours worth of cells it buys from suppliers. The company also said it had secured rights to a lithium clay deposit in Nevada to mine for its batteries.
Tesla is also seeking to reduce or completely avoid the use of some expensive materials that go into its battery cells today.
Associate Professor in Civil and Environmental Engineering at Carnegie Mellon University, Costa Samaras, said: “If Tesla can make a cheap, reliable battery with little or no cobalt, it will really improve the ability of EV’s to scale up. Most cobalt is from the Democratic Republic of Congo and the mining has long generated human rights and child labor concerns.”
On Monday, Musk warned that the advances announced at battery day won’t find their way into mass production until 2021, sending the company’s stock down about 6% ahead of the event on Tuesday.
Due partly to Covid-19 health orders that limit the size of in-person gatherings, Tesla postponed its annual meeting from July this year to Sept. 22, 2020. The company previously held its shareholder meetings at the Computer History Museum in Mountain View, California but moved the event to the parking lot of its U.S. vehicle assembly plant in Fremont. Shareholders parked and sat in their cars at the meeting, which Musk characterized as a “drive-in.” They honked in lieu of applause.
Those who wanted to attend had to obtain a winning lottery-style ticket (or other special access) to the meeting. Otherwise, shareholders could log into a website to ask questions to be answered during the live-streamed event.
At the end of the battery day presentation, Musk fielded questions from fans and shareholders. During the question-and-answer session, Musk said Tesla was designing its Cybertruck to meet requirements for the U.S. market, but a smaller version would need to follow for international markets.
Cannacord Genuity analyst Jed Dorsheimer wrote in a note to investors before the meeting:
“The big question will be on follow through. It’s one thing to announce all these breakthroughs, which might be great for momentum algorithms, but like most things TSLA, the devil will be in the details, which sadly will take some time to play out.”
Cannacord maintains a “Hold” rating and a price target of $442 on shares of Tesla currently.
Shares of the electric car maker are up more than 400% year-to-date.