On Tuesday, the investors cut $50 billion in Tesla’s market worth despite CEO Elon Musk’s promise to reduce electrical car costs so radically that a $25,000 e-car that drives itself will be possible, but the customers have to wait at least 3 years for that to happen.
Tesla’s Market Cap Decreases by $50 Billion Despite Musk’s Promise of Cheap Vehicles
The company’s market cap dropped $20 billion in only a couple of hours after trading closed on Tuesday, as Musk and other Tesla executives introduced their brand new battery and production plans. Shares closed down 5.6 percent and dropped yet another 6.9 percent after some hours.
Roth Capital Partners analyst Craig Irwin said,
Nothing Musk discussed batteries is a done deal. There was nothing tangible.
Investors had anticipated two important announcements at Musk’s oft-touted”Battery Day”: The development of a”million-mile” battery good for a decade or longer, and a particular cost reduction goal expressed in dollars per kilowatt-hour that could ultimately drop the purchase price of an electric car below that of a gasoline car.
Musk offered neither . Rather, he promised within the upcoming few years, the battery prices would be reduced to half using modern technologies and processes and provide an”affordable” electric vehicle.
In three years . . . we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car.
Musk added that the company’s ambitious new vehicle project, battery designs and manufacturing processes aren’t fully complete. Previously, Tesla has frequently missed production targets earlier set by Elon Musk.
The mission of the company is to build as many as 20 million electric vehicles each year. On the contrary, in 2020, the entire auto industry expects to deliver a total of 80 million cars globally.