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Why Tesla Has A Huge Advantage In The Battery Race

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Why Tesla Has A Huge Advantage In The Battery RaceTesla Inc (NASDAQ: TSLA) recently broke the 400-mile battery charge threshold. Its closest competitor is now 100 miles behind.”We believe Tesla has a competitive advantage in batteries that is under-appreciated by investors. In the future, we expect that advantage to widen,” Loup Ventures managing partner Gene Munster wrote in a note. “Bottom line: Tesla’s lead in batteries is sustainable and other auto OEMs will struggle to gain measurable ground on the company’s 80% US EV market share.”Why Does Tesla Lead? Tesla’s edge over auto peers comes from its (expensive) interest in vertical integration.”The most significant advantage is that product design cycle times decrease, which quickens the pace of innovation, which is Tesla’s central competitive moat,” Munster wrote. “Additionally, the end product typically yields better performance and reliability compared to products built with horizontal integration.”So far, the strategy has resulted in superior vehicle range. As Loup sees it, Tesla could maintain its superiority through in-house cell design and production. The company recently acquired Maxwell Technologies to design its own battery with proprietary chemistry.”Separately, based on the company’s 2019 acquisition of Hibar Systems, we expect Tesla will begin manufacturing its own batteries in the next three to five years,” Munster wrote, noting that vehicle demand will require collaboration with extant suppliers.Loup Ventures expects Tesla to announce an Austin Gigafactory focused on battery cell production.Price Action: At the time of publication, Tesla’s stock was trading around $1,005 per share.Related Links:Can Tesla’s Stock Maintain The Magic ,000 Level?Tesla Analyst Says Plunging Registrations In Key California Market Pushing Street Delivery Estimates DownLatest Ratings for TSLA DateFirmActionFromTo Jun 2020Goldman SachsDowngradesBuyNeutral Jun 2020Morgan StanleyDowngradesEqual-WeightUnderweight Jun 2020WedbushMaintainsNeutral View More Analyst Ratings for TSLA View the Latest Analyst RatingsSee more from Benzinga * Your Favorite Companies, As Defined By Urban Dictionary * 5 Reasons Why Morgan Stanley And Goldman Sachs Downgraded Tesla * Tesla Analyst Values SpaceX At B, With Starlink The Biggest Growth Driver(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.


Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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