Goldman Sachs sees big things coming for Tesla’s Battery Technology Day for September 22. Still, buying stocks for analyst Mark Delaney is not enough. Nor does the battery have enough capacity for the day
Investors Friday. They are selling stock again.
Delaney’s rates are equal to Hold and have a $ 295 price target on the stock. The stock is still well above that level, however, with shares of Tesla (ticker: TSLA) declining by about 5% to 5% in prepaid trading. Over the past four days, including Friday’s premarket levels, the stock is down 23%.
This will be a pleasant surprise for investors. Delaney says battery costs have been falling at an average annual rate of 23% for the past few years.
A $ 100 per kWh is an 85 kWh battery pack that drivers get, say, 250 to 350 miles per charge, costing $ 8,500. That cost can be compared to a gasoline engine, power transmission, and gas tank with an electric motor and power electronics. The battery is typically the most expensive part of an electric vehicle powertrain and the EV seems to be more competitive than conventional gasoline powered vehicles due to lower battery costs.
A battery pack is made, largely of battery cells, such as AAA battery consumers purchase and battery modules.
Delaney believes that Tesla will talk about battery manufacturing capacity and battery reliability. “Tesla’s 2019 Impact Report showed that model S / X battery degradation is between about 10% to 15% [150,000 and 200,000] Mi, ”says Delaney. “Tesla’s current warranty covers battery capacity at 70% for 8 years or more [100,000 to 150,000] Miles. ”
Better battery life – how often the battery can be recharged – can help Tesla keep the vehicle’s residual values higher. High used car prices are a competitive advantage for auto manufacturers. They allow them to price new vehicles and offer better lease rates.
This is a very fast report. But other things are currently on the minds of investors. The shares have been hit by two things this week: the announcement of the sale of $ 5 billion worth of stock on Tuesday and the news that longtime holder Bailey Gifford sold his Tesla holdings.
However, Gifford said that he sold the stock to manage the position size. Tesla shares have done so well that it has become a part of Gifford’s overall portfolio. This may sound like a strange reason to sell, but too much risk for a single issue eliminates the diversification benefits of holding a portfolio of stocks.
The shares are more than 20% below their height, but do not call it the Tesla Bear Market. Generally the bear market – defined as a drop of 20% from the high – does not apply to single shares. And Tesla’s shares are still 430% year-over-year, as of Thursday’s closing price, crushing comparable returns of
Dow Jones Industrial Average.
Write Al root at [email protected]