Tesla Inc CEO Elon Musk said on Monday improvements to be revealed at the electric automaker’s “Battery Day” event would not reach “serious high-volume production” until 2022, leading to a decline in its shares.
Many analysts and industry officials expected Musk to reveal battery improvements at the widely-anticipated event, extending the company’s lead over major automakers such as General Motors, Volkswagen, and other rivals.
In a tweet ahead of the event planned for Tuesday, Musk said: “This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.”
Musk also said the automaker intends to boost battery cell purchases from suppliers Panasonic, South Korea’s LG Chem and China’s CATL, and possibly with other partners.
Despite the cell suppliers’ working at maximum speed, Tesla still expects major shortages in 2022 and beyond, he added.
Shares of the automaker were last down over 5% at $425.50 in extended trade.
Tesla is working to produce new, bigger battery cells with higher energy capacity at its own manufacturing facility located in Fremont, two people knowledgeable with the matter have told Reuters. They said the battery cell would have a diameter of 42 mm, double the diameter of the 21 mm cell used in Model 3.
One of the people said the automaker’s battery line would have a yearly production capacity of 1 gigawatt-hours.
Battery sources and experts state the automaker faces challenges to mass-produce batteries in-house by itself and may have to partner with other battery vendors such as Panasonic to mass-produce the batteries.
Tesla’s shares had earlier risen on Monday, helped by an email from Musk that said the company was hopeful of record car deliveries in the third quarter.
