Tesla dampens Battery Day expectations, Shares fall

Shares of Tesla fell more than 5% on Tuesday after CEO Elon Musk tried to dampen expectations ahead of the company’s Battery Day presentation.

Tesla was expected to share on Tuesday details about a new battery cell it recently developed which could be a big leap for the electric vehicles maker. This new technology is expected to give Tesla an additional advantage over its competitors. However, Musk dampened analysts’ expectations after he tweeted on Monday cautioning about the challenges to reach mass production.

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“Important note about Tesla Battery Day unveil tomorrow,” Musk said in a Monday tweet. “This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.”

To tackle the challenges of short battery cell supply, the company has built its prototype manufacturing line for battery cells in California, close to its U.S. car plant. Unless this happens, Musk says the company will "still foresee significant shortages in 2022 & beyond." Until then, Tesla will continue to patronize its suppliers, CATL, Panasonic, and LG.

After-hours trading on Monday, Tesla shares fell more than 6% after closing 2% higher at $449.39. Regardless, the company stock is still up more than 400% year to date.