Why Tesla's Next Break-Out Isn't Coming

Tesla’s (NASDAQ:TSLA) Battery Day created plenty of buzz and excitement that could have sent the stock back to the all-time post-split high of $502.49. Instead, the event was much ado about nothing. Instead of setting the stage for the next breakout, Tesla may take its time trending higher. What happened?

On Battery Day (Sept. 22), the company said it had some battery innovations that weren’t quite ready. The company said its Shanghai Gigafactory may scale to increase production to one million cars annually.

CEO Elon Musk said that strong demand for EVs and renewables will create a shortage of batteries. Today’s battery factories cannot scale fast enough. Until that happens and the cost of sells, measured in k/Wh, will delay the declines in EV prices.

In the long term, Tesla will benefit from vertical integration that cuts the dollar per kWh down by 56%. As it scales to 20 million per year production rate, Tesla wants to make fully autonomous vehicles available at $25,000. Though market price in the future value of a company’s worth, Tesla’s promises are years away. Anything may happen in that time. For example, General Motors (NYSE:GM) is taking the EV revolution seriously and investing in its production.

Tesla stock is for traders. Sell on the spike and buy on the dip but at today’s entry prices, do not hold the stock for the long term.