Tesla (NASDAQ: TSLA) shares plummeted Tuesday after the company CEO Elon Musk announced that the upcoming Battery Day would bring unwelcome news.
TSLA shares dipped by more than 5% to $423.23 each. The stock dived further after hours. At the time of this writing around 7:23 p.m. EDT, the stock was trading around $392.83 per share, down almost 7%.
Musk says an update on Tesla battery will affect its long-term vehicle production
Mainly, Wall Street analysts and investors are waiting for Musk’s update regarding Tesla’s new battery, which the company previously announced. The market is hoping that it would give Tesla an edge over its competitors in the electric vehicle space.
Musk halted such optimism, saying in a tweet “Important note about Tesla Battery Day unveil tomorrow,” adding that it “affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.”
The outspoken CEO made it clear that Tesla would work to acquire additional battery cells from various suppliers including LG, CATL, and Panasonic. That said, he cautioned any enthusiasm, saying “we still foresee significant shortages in 2022 & beyond unless we also take action ourselves.”
Tesla’s new battery cell production line is located in Fremont, California, in close proximity to its car manufacturing plant.
In recent months, Tesla has become the subject of many market conversations and speculations. One of the reason’s company’s shares are performing very well this year.
Earlier in September investors held hopes Tesla would be chosen by the S&P 500 Index Committee after posting four consecutive quarters of profit. It wasn’t meant to be and only e-commerce website Etsy, pharma firm Catalent, and test equipment maker Teradyne were added.
For Tesla, this surely isn’t the end. Many still think the carmaker has the potential to be added to the S&P 500 after obtaining a valuation greater than some of the world’s largest car companies, including Volkswagen and Toyota. There have been whispers that Tesla is primed to enter the S&P 500 by 2021.
TSLA shares are still up 400% year-to-date, supported by a recent 5-to-1 stock split.
One thing is for certain, Musk has been on a roll as of late even after landing himself in hot water for contesting California’s COVID-19 pandemic lockdowns which closed thousands of businesses across the state.
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