Tesla is holding its battery day tomorrow, so analysts and experts have been writing about what they expect to see. The event is scheduled for tomorrow after closing bell. The battery day event was originally scheduled for April, but Tesla had to postpone it due to the COVID-19 pandemic.
Q2 2020 hedge fund letters, conferences and more
Bulls versus bears on Tesla's battery day
In a report today, Canaccord Genuity analyst Jed Dorsheimer said bulls will talk up a million-mile battery or carbon-light supply deals. On the other hand, bears will probably point out that Tesla's promotions often fail to materialize, which he called "a valid concern., and shift toward more difficult milestones like the semi, Cybertruck and competition.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy Read More
Dorsheimer expects Tesla's battery day to offer "a trove of tangential ways for investors to capitalize on a shifting market for BEVs" (battery electric vehicles." He highlighted his expectations for the batteries anodes and cathodes in his report.
Anodes and cathodes
He predicts that Tesla will reveal new anode chemistry. He pointed out that the company acquired Maxwell Technologies, a top developer and manufacturer of energy solutions. In addition to that acquisition, he expects the automaker to announce a deal with a silicon-based solution like Sila Technologies. That move would provide performance benefits without battery swelling.
He added that this would be positive for Aspen Aerogel due to its development of technology for battery electric vehicles. He believes a silicon solution is the "next area for industry progress from a cost, longevity and density perspective."
Dorsheimer believes Tesla will announce a number of strategic supply agreements for the cathode. After reviewing the patent applications and scientific papers, he expects supply deals for nickel, cobalt and possibly manganese for Tesla's NMC622 chemistry.
He also expects Tesla to address concerns about LFP beyond China, like in Europe. The automaker has already said it would do this, and Dorsheimer believes it would suggest that it is worried about competition in Europe.
What else at Tesla's battery day?
Looking past the chemistry of the anode and cathode, the analyst expects Tesla to highlight its battery management software and cooling solutions to improve performance further. Dorsheimer added that the company must promote its technology, given that the Semi and Cybertruck will both require high-density battery solutions.
He also said this topic will likely be addressed because of recent comments about the carbon dioxide footprint of a Tesla EV versus vehicles with gas-powered internal combustion engines. He said the footprint largely depends on how and where its metals are sourced.
"The big question will be on follow through," he summed up. "It's one thing to announce all these breakthroughs, which might be great for momentum algorithms, but like most things TSLA, the devil will be in the details, which sadly will take some time to play out."
Dorsheimer has a $442 price target and Hold rating on Tesla stock.