Forget for a moment the silliness around Tesla CEO Elon Musk’s questionable taste in baby names, his sudden shift to an Imagine-based lifestyle or his sparring match with California authorities over re-opening his Fremont, California factory (OK, that’s big news). More big news may be coming soon on future expansion plans and advances on Tesla’s battery tech front.
Tesla Stock Sneezes, Then Recovers
First off, Tesla’s stock price continues to defy gravity, rising to over $800/share in the last few days after sinking to below $400 as recently as mid-March as the Covid-19 pandemic swept over the nation and world. The unlikely but not completely unexpected rebound comes after the stock peaked at an incredible $944 a share just two months ago. Other automakers have not fared nearly as well, and Tesla may be getting a boost due to speculation that car buyers coming out of the pandemic might be more inclined to go electric – and right now, that means Tesla.
The strong stock showing – despite pushback from Elon – now has Tesla within striking distance of market cap leader Toyota, which has seen a large drop in its stock price during the pandemic. Tesla is right at $150B while Toyota is just ahead – for now- at $160B. Toyota had been over $225B in the months ahead of the Covid-19 outbreak. For context, Ford, which restarted operations this week at nine facilities, has a seen its stock price fall by nearly half from 2019 highs and has a market cap of just over $21 billion.
Musk’s aggressive fight to reopen both the new China gigafactory and the Fremont plant have certainly helped the company to appear to be on the comeback trail, and investors have clearly jumped on board. Despite a struggle with California officials who had wanted the Fremont plant to remain shuttered through May, Musk was able to broker a deal to get the plant up and running last week, with enhanced safety measures in place. President Trump was in Musk’s corner this time around, tweeting he felt Tesla should be able to reopen its California factory “NOW.” Tesla resumed production at the new Shanghai, China gigafactory on February 10th. So essentially, Tesla is back up and running at close to pre-outbreak capacity – at least for now.
Tesla ‘Terafactory’ Decision due Soon
Musk thinks big, and he has long said he envisions a fleet of vertically integrated gigafactories turning out cars, batteries and more around the world. Now, he’s thinking even bigger, saying the next Tesla location could be a “terafactory,” the scale of which would dwarf the already massive gigafactories he had planned. Where will Terafactory One land? The Austin, Texas area, land of low (or at least lower) housing prices and no income tax, is said to be a favorite of the sites under consideration. North Carolina and Oklahoma are also in the running, with the mayor of Tulsa trying to woo Musk by tweeting that he thinks Cybertrucks, which will be made at the new facility, would make great police cars. But Austin remains the front-runner as Tesla has smaller ancillary tech operations already up and running in that city.
Wherever the new plant ends up, Musk has an aggressive timeline for construction, saying he hopes to have the plant built by the end of 2020, a herculean task. However, the Shanghai gigafactory went from dirt to production in a scant 10 months, so theoretically, it’s possible. During his kerfuffle with California over re-opening, Musk said he was ready to move Tesla HQ (and production) out of the state, so whichever state ends up with the new Tesla plant could also see a bonus included as relocated Tesla team members start shopping for homes nearby. Smart money: Austin.
Battery Tech Boost
The bright sun at the center of the electric vehicle universe is the onboard electrical charge storage system, perhaps better known as the battery. Musk has claimed in the past that he’s working on a “million-mile battery,” and while a decade after the first Tesla cars began to appear, it seems as though long-term battery degradation isn’t the problem many skeptics said it might be. Even so, Tesla, other carmakers and a raft of tech companies are pouring millions into developing ever better battery technologies. Battery tech for electric cars is still in its relative infancy; changes in battery type, charging schemes and safety tweaks will eventually largely eliminate range, charging and safety worries. It’s only a matter of time, investment and R&D effort.
Tesla sources a lot of its batteries from Panasonic, but the long-term plan is more vertical integration, with Tesla making batteries in the giga/tera factories alongside the vehicles. Musk has made moves to accomplish this goal, including ordering battery manufacturing machines from South Korea’s Hanwha Group, according to reliable EV watch site Electrek.
A key goal in the bid for better batteries is to also keep lowering the cost of producing the cells until a point can be reached that the price of an all-electric car with similar features, range and at least similar performance numbers (if not better) reaches parity or better with a gas-powered vehicle.
While charging infrastructure in the United States lags behind other countries, the buildout continues apace, especially in major cities and most interstate highways. Many electric car owners “refuel” by charging their electric vehicles at home, something gas-powered cars and trucks can’t match in terms of convenience or price per unit of energy used (it’s much cheaper to charge up a car than fill it with fuel, even with low gas prices).
Future battery technologies, notably solid state batteries, will perform far better, charge much faster and have much more capacity that today’s lithium-ion-based formulations. The first company to commercially produce a reliable successor to today’s technology could dominate a tech market the likes of which has never been seen before as the world continues to switch from fossil fuels to electricity-based transportation. Tesla would like to be that company, but they are certainly not alone in that quest. Batteries will power the future.
Tesla-Related Bonus: SpaceX Manned Launch Mission!
Kvetching about reopening his plant in California isn’t the only thing on Elon’s mind these days, as a make-or-break manned test of the SpaceX space capsule, the Crew Dragon, is slated for May 27. The high-tech capsule, which features a flight-tested escape system that will activate if the Falcon launch vehicle runs into trouble, will ferry two astronauts plus needed gear to the International Space Station. Crew members will wear spiffy new SpaceX space suits and the interior of the capsule reflects Tesla’s minimal aesthetic, with touch screens, minimal buttons, and a spaciousness the Apollo astronauts could only dream of. It can also be remotely controlled, and has autonomous tech as well.
If all goes well, it will mark the return of the United States to flying crews to the ISS for the first time since the Space Shuttles were retired in 2011. Since then, crews have been coming and going from the ISS aboard Russian spacecraft, much to the chagrin of NASA and the American space community. It could also be another feather in Musk’s SpaceX cap. He has stated repeatedly that he wants to begin manned flights to Mars as soon as possible, and a big contract from NASA for all things ISS would be a big step toward fully financing his dream of settling the Red Planet. Be sure to catch the launch livestream as it happens.
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