Tesla Bear Dan Levy Admits Huge Battery Advantage

Carmen Reinicke has an interesting story today over at Markets Insider. I’ll start with the headline:

One of Tesla’s fiercest bears admits the company has an enormous leg up on competitors when it comes to battery production (TSLA)

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An enormous leg up on competitors you say? When did you realize this? Sometime between the 204-mile range étron and the 201-mile range Toucan?

Dan Levy, a Tesla bear who has predicted the stock will fall as much as 44%, wrote on Monday that the company is ahead of the competition on batteries.

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Naturally, given their huge lead in batteries, you’d expect the stock to fall 44%.

Do these people not realize that batteries are a very important part of making electric vehicles? The whole car is just a battery.

The note came after Levy and his team visited the Tesla Gigafactory 1 in Nevada.

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Cramer taking a ride in a Tesla… Dan Levy visiting the Gigafactory… Reality is a Tesla bear’s worst enemy.

Tesla bear who has estimated the stock could fall as much as 44% is giving the company “credit where due.”

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That’s a first.

Tesla is likely ahead of others on batteries — the core of the electric powertrain,” Dan Levy of Credit Suisse wrote in a note to clients on Monday. He maintained his “underperform” rating and target price of $200 on shares of the company.

“We believe Tesla is leading in the areas that will likely define the future of carmaking — software and electrification,” Levy wrote.

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Wow, that kind of cognitive disonance is quite impressive!

The surprisingly positive note came after Levy and his team visited Tesla’s Gigafactory 1 in Nevada. Last year, Tesla’s battery capacity was a total of 44 gigawatt-hours, with 35 coming from the Nevada factory and nine from Panasonic, Levy wrote.

That’s impressive, as the rest of the auto industry has a combined battery capacity of 46 GWh: “33 GWh from Chinese OEMs, and another 13 GWh from non-Chinese OEMs,” Levy wrote.

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Interesting, it turns out Tesla is making more batteries than the rest of the auto industry combined. I wonder if that matters at all competitively. Probably not, right?

Actually, if you exclude Chinese production (which was heavily subsidized) Tesla is producing 3.3 times more batteries than the rest of the industry combined. That’s just insane. Legacy auto should be ashamed.

Levy said that going forward he expects Tesla to “highlight why its work in battery gives it a clear competitive advantage vs. other automakers.” More information on the battery strategy will likely come at Tesla’s “Powertrain Day,” scheduled in the first half of 2020.

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Everyone is dying to hear what Tesla has been cooking up at Battery and Powertrain Investor Day in 2020. We have some clues that they are working on their own lithium-ion cells, and we may get to find out what the Maxwell acquisition was all about. Dry electrode battery technology? Ultracapacitors? Whatever it is, it will make waves.

Levy expects that, its lead in batteries aside, Tesla will face increasing competition as other automakers develop their own electric vehicles. If Tesla doesn’t capitalize on its position leading the electric-vehicle pack, it could be unseated, Levy argued in November.

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The competition is coming!!!

Even the bears are starting to admit: Tesla has a HUGE advantage in battery technology and software. @elonmusk @tesla

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One thought on “Tesla Bear Dan Levy Admits Huge Battery Advantage

  1. While exclude Chinese makers? Sure, EVs with Chinese batteries get some purchase subsidies in China (I haven’t heard of any other battery-related subsidies) — but so do other EVs using (mostly) non-Chinese batteries in other parts of the world… Seems an arbitrary discriminator.

    It should be noted though that quite a significant part or Chinese EV battery production is LFP, which is still used in Chinese buses, but considered obsolete for passenger EVs. When it comes to passenger EVs, Chinese capacity — and thus all non-Tesla capacity — is quite a bit lower… But then again, the Tesla figure mentioned in the article is off as well. (It’s theoretical capacity — which hasn’t been quite reached in Nevada due to production ramp issues; while Japanese capacity hasn’t been fully utilised due to Modes S/X sales drop…)

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