$TSLA Momentum Stalls

Talk about $TSLA disappointment.

Investors expected Elon Musk to shine the light on Tesla’s new battery factory when he spoke at the California Public Utilities Commission yesterday. What they got instead was a wonky panel discussion of government’s role in fostering renewable energy filled with rambling questions from audience members.

Musk’s parting words called for a carbon tax, a politically unpopular move that has been defeated before.

The lack of new Gigafactory news took some of the wind out of Tesla’s sails. The stock fell more than a percent early Friday morning.

$TSLA sold it all yesterday…made a ton..will look to get back in at a lower level

— Barry Mick (@barrymick) Feb. 28 at 09:24 AM

Shares of the electric car-manufacturer have risen 30% since the Feb. 19 earnings call when Musk first confirmed that Tesla would build a plant capable of manufacturing lithium ion batteries cheaply enough to support the construction of a mass-market electric car. They spiked after a Morgan Stanley put a $320 price target on the stock shortly after the announcement. Morgan Stanley analysts argue that the battery factory would allow Tesla to disrupt the $360 Billion-a-year power industry.

Some cashtaggers said Tesla’s momentum is now broken and claimed to short the stock.

Our biggest short positions are now $TSLA and $XRT etf.

— StandpointCapitalLLC (@StandpointCapitalLLC) Feb. 28 at 09:37 AM

On Wednesday, Tesla announced that its $4 to $5 Billion Gigafactory would launch production in 2017. Tesla plans to invest $2 Billion in the plant and fund the rest through partners, the most likely of which is current battery supplier Panasonic. The company plans for the Gigafactory to reduce battery pack costs by 30% and be capable of producing more batteries in 2020 then were made in all of 2013.

In the panel discussion yesterday, Musk outlined the reasons he believes the Gigafactory will bring down costs and ramp production. Relatively early in the conference, he said that the materials that make up batteries are significantly cheaper than the overall cost of the battery itself. Housing materials suppliers under one roof with battery manufacturers will create efficiencies.

Musk also said that a key to the success of both Tesla and the solar industry will be smaller, cheaper battery packs. According to Musk, for solar to see mass adoption the industry needs battery packs capable of storing sun-energy for use at night and fitting inconspicuously in a garage.
Musk is the chairman of SolarCity, $SCTY, a residential solar panel installer headed by his cousin Lyndon Rive. Yesterday, Rive spoke on the panel as well. Rive accused utility companies of delay hooking up residences with solar panels to the grid because they do not want to change the status quo. He called on government to force utilities to stop delaying tactics.

Despite the lackluster conference, some StockTwits’ users said they believe Tesla will keep trading higher as more Gigafactory news leaks out. Tesla still has to name its partners in the venture and choose a location.

$TSLA as soon as the partnership is announced this shoots to $275-$280

— Roy Mundy (@royalthirdauctions) Feb. 28 at 08:00 AM

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