Tesla: and now for the good news
It’s not easy to keep the American electric car manufacturer out of the spotlights, lately with not so good news. At the recent shareholders’ meeting Tesla founder Elon Musk survived a motion of (dis)trust and can stay on as CEO. He announced other good news.
Elon Musk stays on as Chairman and CEO of Tesla. Also his brother Kimbal Musk and 21st Century Fox boss, James Murdoch, both also under discussion, can stay on as members of the board. The fact that several good news items were communicated drove the share price on Wall Street 8 higher.
Elon Musk said at the meeting that the price of battery cells can descend this year under 100 dollar per kWh, a price level that was only foreseen in 2020. At this price level electric cars can become really competitive with conventional cars, experts think. Six years ago the price was still 400 dollar/kWh, but rising rare metal prices can hinder further price decreases for batteries.
Furthermore Tesla announced being into talks with the Chinese authorities about building Tesla vehicles and batteries in Shanghai (South-East China). “We are enthusiastic about creating our first ‘Gigafactory’ for batteries outside of the US, in China”, has declared Robin Ren, head of sales at Tesla.
“It will be very important being able to produce the cars as well as their batteries on the continent where they are sold”, Elon Musk added. “Tesla hopes to build 10 to 12 of these Gigafactories in the world in the long term. For the one planned in Europe the location will be decided on later this year”, he concluded. Tesla is already present in Shanghai with an R&D company searching for new technologies.
Concerning Model 3, the smaller car announced in 2016 which has to make the company profitable, it seems that the biggest troubles to reach the promised production levels are overcome. The 5.000 cars per week should be feasible very soon.
Meanwhile there are doubts about the price of the car. When launching it the company was promising a basic model for 35.000 dollar or even less, attracting 100.000s of potential buyers ready to reserve a car by paying a reservation fee. Most of them are still waiting.
Recently Elon Musk presented more sophisticated versions of the Model 3, with 2 engines and four-wheel drive, but also costing 75.000 dollar and more. Analysts think that it will be very difficult to produce the basic model at the announced price and make money. This base model has be postponed to 2019. Wait and see.