Tesla’s share value dropped by $50bn (£39bn) last night as investors reacted to speeches by Elon Musk and other company executives at the company’s battery day event.
The astronomical figure – in the range of the UK’s annual spending on defence (£38bn) – is more a mark of how much the company has grown over the past year than it is the billionaire chief executive’s celebrity status.
Last September, all of Tesla’s shares were worth around $39bn, but even after last night’s drop the company remains valued at around $390bn – a 1,000% increase in 12 months.
Tesla overtook Toyota to become the world’s most valuable car company earlier this year, despite the Japanese company manufacturing and producing more vehicles.
Its shares closed 5.6% lower and fell another 6.9% in after hours trading on Tuesday as investors, who expected the company to announce a significant milestone in reducing the price of an electric vehicle, were left disappointed.
Musk and Tesla’s other executives instead gave presentations on the company’s new battery technologies and manufacturing strategies, but their outlook was cautious – explaining that the new developments wouldn’t be ready for a number of years.
“In three years… we can do a $25,000 car that will be basically on par [with], maybe slight better than a comparable gasoline car,” Musk told an online audience of more than 270,000.
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Manufacturing an affordable electric car “has always been our dream from the beginning of the company,” Musk added – but the only new vehicle announced was far outside of this range.
Deliveries of the new Model S Plaid, a 520-mile sedan with a top speed of 200 miles per hour (320km), will start in 2021 and is listed on Tesla’s website for nearly $140,000 (£117,00).
Even further into the future – about three years away – Musk said the company was developing a new generation of batteries which will be more powerful, longer lasting and half the price of the ones it currently produces.
Battery development is the key focus for investors, but the company failed to excite everyone.
“Nothing Musk discussed about batteries is a done deal. There was nothing tangible,” Roth Capital Partners analyst Craig Irwin told Reuters.