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Tesla’s lukewarm Battery Day disappoints Korean market

Stocks of electric vehicle parts trading on local markets fall after EV maker’s not-so-surprising annual event

Electric car maker Tesla’s first fully electric sedan Model S. (Tesla)
Electric car maker Tesla’s first fully electric sedan Model S. (Tesla)

Electric vehicle maker Tesla’s promises of a $25,000 electric car and affordable batteries were good enough to receive honks from its fans seated in EVs at the annual Battery Day conference and shareholder meeting. They, however, fell short of exciting investors as the company‘s stock price dropped. The disappointment among global investors also dragged down stock prices of Korean companies in the electric vehicle segment.

Many Korean firms in the EV battery industry, including LG Chem, Chunbo Chem, and Daebo Magnetic, also saw their stock plunge as much as 10 percent.

Along with Panasonic of Japan and CATL of China, LG Chem is one of battery suppliers for the Palo Alto-headquartered electric car manufacturer. It saw its stock slip 5.48 percent to 604,000 won ($518) in the early morning session.

“The US firm’s latest announcements had already been expected by many media outlets, and there was no new technology unveiled at the event,” said Hwang Sung-hyun, an analyst from Eugene Investment & Securities, in a report. “Investors were just able to learn of Tesla’s long-term vision.”

At the conference, Musk vowed to cut the cost of batteries by more than half and roll out an EV model priced at $25,000 in three years. He also announced that a high-end electric sedan, named Model S Plaid, will be launched next year with the preorder kicking off Tuesday (local time). The new EV comes fitted with three motors and boasts a whopping 840 kilometers of range and a top speed of 320 kilometers per hour. It can do a zero-to-100km/h sprint in 2.1 seconds.

Despite lacking some surprising factors for investors, Tesla’s announcements could mean a significant change for the automotive industry landscape in the long run, according to some market experts.

“The $25,000 price tag for an electric vehicle, if launched in about three years as promised by Elon Musk, hints that the doomsday clock for internal combustion engines is ticking becuse there would be no need for consumers to buy ICE vehicles,” said Lee Han-bin, co-founder of lidar-based self-driving solutions developer Seoul Robotics.

The electric car maker’s efforts to reduce EV prices would also press battery suppliers to reduce production costs and their margin, he added.

After the conference held in Fremont, California, the company’s stock dipped 5.6 percent, and further fell 6.84 percent in the after-hour market.

Local companies producing parts and solutions for autonomous driving cars, on the other hand, saw their stocks jump due partly to Musk’s pledge to release upgraded self-driving systems in a month.

Advanced driver-assistant system developer Mando’s stock hit a high of 36,850 won, up 6.81 percent, in the morning, while automotive infotainment system firm Motrex’s shares soared 23.25 percent to 5,540 in intraday trading.

By Kim Young-won (