Investors slashed $50 billion from Tesla Inc’s market value on Tuesday despite CEO Elon Musk’s promise to cut electric vehicle costs so radically that a $25,000 car that drives itself will be possible, but not for at least three years. Tesla’s market cap dropped $20 billion in just two hours after trading closed Tuesday, as Musk and other Tesla executives presented their new battery and manufacturing strategies. Shares closed down 5.6% and dropped another 6.9% after hours.
“Nothing Musk discussed about batteries is a done deal,” said Roth Capital Partners analyst Craig Irwin. “There was nothing tangible.”
“In three years . . . we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car,” Musk said.
Musk acknowledged that Tesla does not have its ambitious new vehicle and battery designs and manufacturing processes fully complete. Tesla has frequently missed production targets set by Musk.
Tesla expects to eventually be able to build as many as 20 million electric vehicles a year. This year, the entire auto industry expects to deliver 80 million cars globally.
Building an affordable electric car “has always been our dream from the beginning of the company,” Musk told an online audience of more than 270,000.