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Tesla Battery Day: No Battery

Sep. 23, 2020 8:34 AM ETTesla, Inc. (TSLA)NKLA3 Comments
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  • Back in the Fall of 2014, Elon Musk said that if you are trying to pitch a new “breakthrough battery technology is please send us a sample cell, okay.”.
  • Musk continued, “Don’t send us PowerPoint, okay, just send us one cell… That sorts out the nonsense and the claims that aren’t actually true.”.
  • Yesterday on “Battery Day” Tesla had only PowerPoint. No actual cell to show. They said they had already produced over 10,000 in a factory located next door.
  • When “Battery Day” has no battery, that’s kind of weak, don’t you think?
  • There was also no comfort in Q3 financials, or comfort on any new product timelines -- except Plaid Mode, which was delayed one year.

NOTE: A version of this article was first published on or about September 23, 2020, on my Seeking Alpha Marketplace site.

I admit that at some point I dozed off from watching Tesla (TSLA) Battery Day. It was so boring. So if there is something I missed, please let me know.

Tesla claimed to have already produced over 10,000 of a new battery cell type, in its factory located right down the road from where the presentation was held. Yet, for an event that was billed “Battery Day” Tesla was only able to show videos and pictures of this alleged new battery.

Would it have hurt to show the actual battery? You know, a physical sample?

Elon Musk actually sait it the best himself, on the Q3 2014 -- yes, 2014 -- financial results conference call, and I remember it well:

Tesla CEO Elon Musk On Breakthrough Battery - "Please Send Us A Sample Cell"

"My top advice really for anyone who says they've got some breakthrough battery technology is please send us a sample cell, okay. Don't send us PowerPoint, okay, just send us one cell that works with all appropriate caveats, that would be great. That sorts out the nonsense and the claims that aren't actually true."

-- Elon Musk

Yes, if you actually have something, don’t do what Tesla did six years later, on September 22, 2020 -- when it showed a PowerPoint or equivalent. Show the actual product, if you have it. Even if it doesn’t work yet.

Elon Musk seems to have forgotten his own advice from the Fall of 2014, quoted above. Tesla “Battery Day” was filled with lots of PowerPoint, lots of talk, lots of ambition about having a new battery, some day in the future.

But no battery. That’s pretty weak for an event billed “Battery Day.”

Meanwhile, in other news from “Battery Day”, Tesla delayed the $140,000 Plaid Mode version of the Model S from late 2020 to late 2021. Whoops. That’s a one-year delay, out of the blue. It was mentioned only casually, as if it didn’t matter at all.

There was also no comfort on the financial results for the third quarter of 2020 specifically, even though the event was held barely a week before the end of the quarter. If there was any confidence that Tesla was looking to achieve a certain level of sales or margin for the quarter, this would have been the time to state any such confidence.

My interpretation is that the quarter won’t be as strong as the true whisper consensus would suggest. If Tesla’s Q3 financial results were going to be that strong, it would have taken this opportunity to say so.

When it comes to the pickup truck and the semitruck, I did not hear any confidence in those delivery timelines either. Perhaps I missed something. If I did, please point it out to me.

However, if Tesla had some confidence to instill regarding those timelines, again this would have been the time to tell investors with great clarity. Tesla would have said something like “We hereby confirm that the cybertruck will be delivered in volume by such-and-such date, and that the semitruck will be delivered in volume by such-and-such date.”

From what I can tell, it didn’t.

The semitruck was unveiled in November 2017 and the pickup truck in November 2019. The semitruck was supposed to be delivered in 2019. Then 2020. Now, seemingly no volume deliveries in 2020 either.

And what about the Roadster 2.0? Tesla took deposits up to $250,000 (the full purchase price) in November 2017, and was going to deliver the car in 2020. It doesn’t look like it will happen in 2020. How do you take full payment -- $250,000 -- for a car in 2017 and don’t deliver it by 2020? Is there a word for that?

My concluding thought at the end of Tesla’s “Battery Day” was that imagine if this were Nikola (NKLA) and Trevor Milton, and its high-profile founder would have waxed poetically about a new battery breakthrough, perhaps with a PowerPoint showing said battery rolling down a hill, what would have investors have said about that? I thought it was very weak.

Analyst's Disclosure: I am/we are short TSLA.

At the time of submitting this article for publication, the author was short TSLA. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent, hosted by most major automakers.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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