Categories
battery Tesla

Tesla’s new 4680 battery cells have been deployed in working vehicles for months – Teslarati

Elon Musk recently clarified that Tesla’s new 4680 cells are already being deployed in some of its vehicles as prototypes. Even more interesting is that the next-generation batteries have already been in use for several months, though the CEO did not state which of its vehicles are equipped with the 4680 Roadrunner batteries.

The Tesla CEO related his update in a recent post on Twitter. While responding to a question about the company’s strategy with its cathodes and its suppliers, Musk noted that Tesla’s own battery cells are already powering some of its cars. That being said, Musk clarified that ultimately, prototypes such as cars that currently run on the company’s 4680 cells are trivial, as they are incomparably simpler than actual volume production.

Suppliers. We’re only doing high energy nickel ourselves, at least for now. Also, maybe the presentation wasn’t clear that we’ve actually had our cells in packs driving cars for several months. Prototypes are trivial, volume production is hard.

— Elon Musk (@elonmusk) September 26, 2020

“We’re only doing high energy nickel ourselves, at least for now. Also, maybe the presentation wasn’t clear that we’ve actually had our cells in packs driving cars for several months. Prototypes are trivial, volume production is hard,” Musk wrote.

Interestingly enough, Elon Musk noted that Tesla is only producing cells that feature high-energy nickel cathodes for now. During Battery Day, Tesla’s slide outlining its cathode strategy listed the Semi and the Cybertruck as vehicles that will be using high-energy nickel. However, the CEO did not confirm if the Cybertruck prototype or the twin Semis doing road tests across the United States are now equipped with 4680 cells. Such a scenario seems plausible as both vehicles only have prototypes today.

(Credit: Tesla)

Using 4680 cells for the Cybertruck and the Semi would be strategic for Tesla, especially since both are heavy-duty machines that are designed to be as tough as possible. The Cybertruck is quite literally created to topple the kings of the pickup market, and the Semi is designed to disrupt the long-haul segment, which is known for its consistent, heavy demands for its vehicles. Needless to say, Tesla’s mettle as an automaker will be put to the test by the Cybertruck and Semi, and their 4680 high-nickel cells could be their trump card against the competition.

That being said, the first vehicle that would likely be released with Tesla’s 4680 cells will be the Model S Plaid, which was announced on Battery Day. The Model S Plaid is Tesla’s most insane sedan yet, with its 0-60 mph time of less than 2 seconds, its top speed of 200 mph, sub-9-second quarter-mile time, and three motors that produce 1,100 hp. The fact that the vehicle has a range of over 520 miles despite its performance-oriented tune hints at just how disruptive Tesla’s 4680 cells really are. The Model S Plaid was announced for a 2021 release date, though speculations are abounding that the vehicle may see a release sooner than expected.

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Homemade Tesla

Tesla’s New Homemade Batteries Are In Cars On The Road Today – CleanTechnica


Batteries

Published on September 26th, 2020 |
by Zachary Shahan

September 26th, 2020 by  


Tesla’s Battery Day presentation packed in a ton of info. On the bottom of this article, I’ll add some of the articles we’ve published that have tried to summarize, further explain, and expound on the Battery Day event. First, though, there’s one point that was not made clear in the presentation that Tesla CEO Elon Musk just confirmed on Twitter.

The Battery Day presentation left some people thinking Tesla was already producing a few of its homemade batteries for use in Tesla cars, left other people thinking Tesla was still far away from getting its own cells into cars, and left others thinking that Tesla was already pumping out 10 gigawatt-hours of batteries a year and stuffing them into new Tesla vehicles. What Elon Musk just clarified on Twitter is that Tesla’s new batteries are in fact in cars on the road today — well, actually, cars that have been on the road for the past several months. (Remember that Battery Day was supposed to occur several months ago.) While it’s not 100% clear whether these are just test vehicles or also some consumer vehicles, it seems to be implied (and only logical) that they are test vehicles still owned by Tesla.

Suppliers. We’re only doing high energy nickel ourselves, at least for now. Also, maybe the presentation wasn’t clear that we’ve actually had our cells in packs driving cars for several months. Prototypes are trivial, volume production is hard.

— Elon Musk (@elonmusk) September 26, 2020

The last line in that tweet also implies that the company is still far from mass production. Having prototype cells in cars is a minimal achievement in Elon’s eyes, compared to the challenge of high-volume production of those cells and getting them into thousands upon thousands of vehicles each month. It appears that because he sees the prototypes as “trivial,” that was not a highlight of the presentation.

For much more information about these cells, Kyle Field wrote an in-depth piece for us that I recommend reading: “Everything You Need To Know About Tesla’s New 4680 Battery Cell.”

Regarding Tesla’s battery production capacity and where it is at the moment, Musk and Tesla CTO Drew Baglino did explain where Tesla is today and where it intends to be in the near term.

“This is not just a concept or a rendering,” Baglino said. “We are starting to ramp up manufacturing of these cells at our pilot 10 GWh production facility just around the corner.”

“It will take awhile to get to the 10 GWh [annualized] production capacity,” Musk added, noting that the company expects to reach that production capacity sometime within the next 12 months. “Actual production plants will be on the order of 200 GWh or more over time.”

Musk’s comments about the challenges of high-volume production come from several years of manufacturing experience, including several challenging years. But as I noted two days ago, Tesla’s 10 GWh “pilot plant” would actually be the 13th largest lithium-ion battery factory in the world if it was online tomorrow. So, Tesla expects to be pumping out a significant flow of battery cells within the coming months, whether it calls that a full-blown factory or a “pilot” plant. Meanwhile, it has much bigger plans than that, plans which could even make it the largest lithium-ion battery producer in the world.

For more on these topics, I recommend reading:

Interested in buying a Tesla vehicle or Tesla solar? You are free to use my Tesla referral code — https://ts.la/zachary63404 — for some bonus Supercharging miles and/or $100 off the solar power system. Don’t worry — it doesn’t bite. 


 








 


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About the Author

is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao.

Zach has long-term investments in NIO [NIO], Tesla [TSLA], and Xpeng [XPEV]. But he does not offer (explicitly or implicitly) investment advice of any sort.










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battery Tesla

Tesla Battery Day: biggest announcements – The Verge

At Tesla’s Battery Day event, CEO Elon Musk made some big announcements: the company’s moves toward eliminating cobalt in its batteries, a new Plaid powertrain for the Model S that could get to speeds of 200 mph, and a new cathode plant to streamline its battery production. And, with the new battery technology, Musk has said Tesla will make a $25,000 car.

The socially-distanced outdoor event had Musk and other presenters addressing Tesla shareholders in parked cars, who honked their horns to indicate their approval of the speakers’ remarks— almost like a drive-in movie/shareholders meeting.

Here are the main takeaways from Tesla’s 2020 battery day:

Tabless battery cells will improve Teslas’ range

Tesla plans to manufacture its own “tabless” batteries, which will improve its vehicles’ range and power. The new batteries will be produced in-house, which Musk says will reduce costs and bring the sale price of Tesla electric cars closer to gasoline-powered cars. It’s expected to lower Tesla’s cost per kilowatt hour, a key metric used to measure electric vehicles’ battery packs. The tabless cells (Tesla is removing the tab that connects the cell and what it’s powering), which Tesla is calling the 4860 cells, will make its batteries six times more powerful and increase range by 16 percent.

Tesla currently sources its batteries from Panasonic, and is likely to keep doing so for some time, but moving battery production in house has been on Musk’s to-do list for some time; in 2018 a shortage of those cells added to production delays. Musk has said the pace of battery production at Panasonic had slowed production of both the Model 3 and the Model Y.

Model S Plaid will cost $139,990 and be available in 2021

Musk has been teasing the Plaid powertrain for a while, which will be a step above its Ludicrous model. It will have a range between charges of 520 miles, get from 0-60 mph in under two seconds, and a top speed of 200 mph. The price is listed on Tesla’s website at $139,990. Musk had noted in the past that a Plaid trim level would “cost more than our current offerings,” which it does. It will be available in the Model S in late 2021.

A new cathode plant is coming… eventually

Musk said Tesla will build a new cathode plant for its batteries in North America, part of its quest to reduce supply chain costs and simplify cathode production. It’s also making improvements to its process that will make cathodes 76 percent cheaper, and produce zero wastewater. The company also plans to diversify the cathodes it uses, because of low nickel supplies.

We don’t know where the new cathode plant will be built, but Musk said in July when Tesla announced its next factory would be in Austin, Texas that he would “strongly consider” runner-up city Tulsa, Oklahoma for future projects.

No more cobalt in the cathodes

Tesla plans to eliminate the use of cobalt in its cathodes. Musk has said he wanted to eliminate it entirely in the past — even though Tesla’s existing batteries use very little. Cobalt is often mined under conditions that violate human rights, which has led to a push to find other materials to replace it.

Musk didn’t offer a timeline for when the company will stop using cobalt but said it will make its batteries significantly cheaper.

“It’s absolutely critical that we make cars that people can people can actually afford,” he said. “Affordability is key to how we scale.”

A $25,000 car is a new goal

Tesla plans to reduce the cost of its battery cells and packs, with an end goal of building a $25,000 electric car. Tesla will hit this goal using its new “tabless” battery cells, and changing the materials inside the cell, which he said should allow Tesla to “halve” the price per kilowatt-hour, Musk said.

This isn’t the first time Musk has predicted that Tesla would dramatically reduce the costs of its electric cars. He first promised a $25,000 EV back in 2018, which he said was possible within three years.

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shareholder Tesla

At Tesla shareholder meeting, honking greets Musk’s profit promise – MarketWatch

Tesla Inc.
TSLA,
-5.59%

shares added to earlier gains in the extended session Tuesday after Chief Executive Elon Musk said that it is looks “promising” that the Silicon Valley car maker would post annual profits and vowed to release a new, more advanced version of Tesla’s Autopilot, the company’s suite of advanced driver assistance systems, “in a month or so.” Musk called the year “insanely hard” and the hardest ever for Tesla. The CEO took the stage at the company’s shareholder meeting, in which key company proposals were approved, and ahead of the battery event. At last check, shares rose 2.4% in constrast with around 1.5% at the start of the day’s events. The meeting was held outside and shareholders on site were in their Tesla cars, honking whenever Musk would say something positive about the company.

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Made-In-China Tesla

Tesla Will Sell The Made-In-China Model 3 To European Buyers – InsideEVs

Would that be an attempt to improve build quality for a very demanding market?

Sandy Munro already said that the vehicles Tesla will produce at Giga Austin would be dramatically better than the ones in Fremont. Chinese customers also said more than once that the build quality of made-in-China (MIC) Teslas was superior to that of the American cars. In that sense, it is no surprise that other markets will soon start to receive their vehicles from Giga Shanghai instead of Fremont, as Bloomberg reports.

According to that article – which is confirmed by Reuters – the production of export vehicles will start in the fourth quarter of 2020. Tesla plans to sell these MIC Model 3 units in other Asian countries, Australia, New Zealand, and mainly in Europe. Ironically, that may make Tesla cars some of the first Chinese vehicles to reach the Old Continent in high volumes.

Tesla Model 3 Made-in-China (MIC)

Apart from the better build quality these Chinese Teslas may offer, exporting them may also indicate that the Chinese market is not willing to have all the cars Giga Shanghai can produce. It may also mean it is cheaper to export them from China than from the US.

With that, Tesla could keep the prices in all these countries at the same level they currently are and improve profitability, as some analysts in both articles argue. The company could also charge less for the cars to make them more attractive and gain market share.

Tesla Model 3 (Source:  New China TV)

There are other fascinating developments associated with this decision. Without the need to produce cars for other markets, Fremont may either spend more time fixing its manufacturing or supplying more vehicles to the US. 

Straight from the shoulder, Tesla should start with the former and then adopt the latter until Giga Austin is ready to pump out its products. Apart from the Cybertruck, the Texan factory will also make the Model Y and Model 3 for the East Coast.

Another thing that may happen is the sale of Model 3 units with LFP batteries in markets other than China. That may be strategic in a moment in which Volkswagen has started to deliver the ID.3, mainly if Tesla can sell such a Model 3 for the same prices VW will charge for the entry-level version of the electric hatchback.

If Tesla’s factory is now slated to export due to insufficient demand, it may soon need to deliver the cheaper vehicle Tesla wants to develop and build there – especially with Giga Austin and Giga Berlin in operation. It will be interesting to see how this new strategy unfolds.

Sources: Bloomberg and Reuters 

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shares Tesla

Tesla shares plummet 17% as tech sector sell-off continues – The Guardian

Carmaker’s value plunges after failing to make S&P 500 listing as all major US stock markets fall





The Tesla logo.







Tesla has been one of the biggest winners of recent stock market rallies as investors have piled into tech companies during the pandemic.
Photograph: Rex/Shutterstock

The US tech sell-off on Wall Street extended to a third day on Tuesday, with electric carmaker Tesla among the biggest fallers suffering its worst day in nearly six months.

The tech-heavy Nasdaq stock market dropped close to 3% in morning trading, following similar falls on Thursday and Friday. Wall Street was closed on Monday for the Labor Day holiday.

Shares in Tesla fell 17% on Tuesday, while Apple was down 4% and Amazon down 3%.

Tesla, with Elon Musk as chief executive, has been one of the biggest winners of recent stock market rallies as investors have piled into tech firms during the pandemic. The company’s share price surged 74.1% in August alone and is up about 400% this year. The rise has made Tesla more valuable than some of the world’s largest automakers, including Toyota and Volkswagen.

The sharp sell-off came after S&P Global, the company behind the S&P 500 index of top US companies, passed over Tesla for inclusion in the index – a move that had been expected to give Tesla’s share price another boost as index-fund investors added the stock to their portfolios. Etsy, the online marketplace for homemade products was a winner, gaining a place in the index.

“Tesla was already under pressure at the back end of last week, so the S&P story has made matters worse,” said David Madden, analyst at CMC Markets. “Despite the recent aggressive sell-off, the stock is still up 325% year-to-date.”

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

All the major US stock markets were in the red on Tuesday morning with the S&P 500 and the Dow down close to 2%. While many traders see the sell-off in tech as a move by investors to take some profits after a historic boom, broader concerns about the US economy also appear to be worrying the markets.

Last week the US released new unemployment figures which suggest that the pace of recovery from the coronavirus recession is slowing. And over the weekend Donald Trump said he was looking to curb the US’s economic relationship with China, an announcement that could herald more trade disputes ahead.

“Typically, bubbles are unwound when the Fed takes away the punch bowl. Obviously, this is very unlikely to happen anytime soon,” Wolfe Research strategist Chris Senyek wrote on Tuesday. “However, this bubble can still be unwound by sustained economic disappointments.”

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shares Tesla

Why Tesla Shares Skyrocketed in August – Motley Fool

And what shareholders might want to do with them in September.

John Bromels

What happened

Shares of electric-car maker Tesla (NASDAQ:TSLA) soared 74.2% in August, according to data provided by S&P Global Market Intelligence. On the last day of the month, Tesla’s stock split five for one.

Tesla’s shares closed out the month at $498.32 per split-adjusted share. Pre-split, that would have been a share price of $2.491.60. On July 31, its shares closed at “just” $1,430.75. This continued Tesla’s 2020 winning streak: The company’s stock price appreciated nearly 500% between Jan. 1 and Aug. 31. 

A rocket blasts off above the clouds.

Image source: Getty Images.

So what

August brought a mixed bag of news for Tesla the company. On the one hand, it was reported that Panasonic was increasing its investment in Tesla’s Gigafactory 1 by $100 million. On the other hand, the company also encountered some setbacks in China. 

But who am I kidding? Tesla’s incredible share price jump was due almost entirely to its decision to split its stock. All of the stock’s gains occurred between the company’s Aug. 11 announcement that it would split its shares five for one, and its first day of post-split trading, Aug. 31. 

A stock split doesn’t affect the value of individual investors’ holdings, and with many brokers offering fractional shares, a high share price isn’t the barrier to ownership that it once was. Still, many investors balk at plunking down four figures for a single share, so Tesla’s decision was seen as likely to entice a lot of new investment.

That may have been a self-fulfilling prophecy: Expecting a huge windfall on Aug. 31, investors began piling into the stock. That drove the price higher, which prompted more interest driven by fear of missing out. It all culminated in the first post-split day itself, when a record 118.4 million shares changed hands (about double Tesla’s previous volume record, set in February). 

Now what

Now investors are taking their profits: Tesla’s shares are down nearly 20% so far in September. It’s not really surprising. Investors bought the carmaker‘s stock at ridiculously high valuations expecting a big payday on Aug. 31. Once those bets paid off, all that was left was that ridiculously high valuation. Now that the stock price has started dropping, short-term investors are getting out to protect their gains. 

Honestly, now’s probably a decent time to take some profits from Tesla. Even with recent drops in share price, the stock is still up more than 350% year to date, and more than 700% over the last five years. Tesla’s price is so divorced from any traditional valuation metrics that it’s impossible to know where it’s likely to end up in a month, let alone a year or two. 

But nothing fundamental has changed about the company itself or its operations, so investors shouldn’t feel the need to follow the crowd to the exits if they’re still bullish on the stock.


John Bromels owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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Stock Tesla

Why Tesla Stock Is Falling Again Today – Motley Fool

Investors continue to take their profits on the electric-car maker’s stock following its monstrous rally.

What happened

Shares of electric-car company Tesla (NASDAQ:TSLA) are trading sharply lower again today. The stock fell as much as 9.5% but is down 6.5% as of 10:25 a.m. EDT.

The growth stock‘s decline likely reflects a continuation of a breather it seems to be taking after rallying about 1,000% between August 2019 and August 2020.

A chart showing a stock price moving lower

Image source: Getty Images.

So what

This marks the third day in a row that the stock has declined by more than 3%.

Earlier this week, Tesla announced it was raising capital by issuing new shares. The automaker set out to raise $5 billion of funds with the capital raise. The company’s willingness to dilute its stock in exchange for cash may have signaled to the market that the automaker thought its shares were overvalued.

It’s not surprising, of course, to see the stock come down after soaring sharply higher over the last 12 months. The stock’s gains following a stock split announcement in early August were borderline irrational.

Now what

Long-term Tesla investors certainly aren’t hurting. Even including the stock’s pullback this week, shares are up more than 800% over the last 12 months.

The market’s expectations for the company remain high. Investors should look for the automaker to meet or exceed its target for 500,000 deliveries this year — up from about 368,000 last year. In addition, investors should watch for continued progress on the construction of its factories in Berlin, Germany, and Austin, Texas.


Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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Apple Tesla

Apple and Tesla are doing stock splits right now. Should you buy? – Yahoo Finance

Apple and Tesla are doing stock splits right now. Should you buy?

Apple and Tesla are doing stock splits right now. Should you buy?

If you’ve ever wanted to own a piece of Apple or Tesla, you’re in luck. Both companies are doing stock splits that will be completed by Monday, which means their shares will become more plentiful — and affordable.

A stock split is often a good sign for shareholders. It suggests that a company is on firm financial footing and expects to maintain or exceed the gains it has seen in the past.

Read on to learn about what a stock split is, what it means for investors and whether you should buy stock before or after a split is completed.

What does it mean when a company splits its stock?

<cite>Jan Faukner / Shutterstock</cite>” data-src=”https://s.yimg.com/ny/api/res/1.2/8nx4IQjRRd4DWLAvPuKdXw–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/a977a892638a6e583cedd76a0dc3f74d” src=””></img></p>
</div><figcaption><cite>Jan Faukner / Shutterstock</cite></figcaption></figure>
<p>A stock split happens when a company’s board of directors decides to increase the number of shares outstanding, giving current investors more shares but with a lower value.</p>
<p>Stock splits are typically defined by a split ratio, like 2-for-1 or 4-for-1.</p>
<p>In a 2-for-1 stock split, investors get an additional share for each share they currently hold, with shares now worth half their value before the split.</p>
<p>A 4-for-1 stock split gives shareholders four times the number of shares in their portfolio, with each share worth a quarter of its previous value.</p>
<h2>Why would a company split its stock?</h2>
<figure>
<div>
<p><img alt=Phongphan / Shutterstock” data-src=”https://s.yimg.com/ny/api/res/1.2/vYg6BlGP4iye328BbcbmuQ–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/804fbe7e15d098c25e368e65d11293a9″ src=””>

Phongphan / Shutterstock

Stock splits typically occur when a company’s share price becomes too high for everyday investors to buy.

For most casual investors, stocks going for hundreds or thousands of dollars a share aren’t affordable — unless they use an app that lets a person buy fractional shares. Splitting a stock makes individual shares cheaper without changing the company’s overall value in the market, and it makes those shares easier to buy and sell.

In some cases, stock splits also can bump up share prices over time. Smaller investors may jump at the chance to purchase low-cost shares of a blue chip stock after a split, which will in turn boost demand and drive up the price.

A 2019 Nasdaq study found that, following a split, big companies saw their stock outperform the market by an average of almost 5% over the next year.

Do you lose money if a stock splits?

If you already own shares in a company that splits its stock, the split won’t change the value of your investment.

It’s true that your shares will be worth less, but you’ll also own a proportionally larger number of them.

And as we mentioned above, a stock split generally spells good news for shareholders, since the increased demand from smaller investors may cause shares to appreciate in price.

Stock split example: Apple

<cite>HAKINMHAN / Shutterstock</cite>” data-src=”https://s.yimg.com/ny/api/res/1.2/2z46T_hBNzQ.bokqAabg4w–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/5becdad7e8cb87448288b7cc7d4a2ff2″ src=””></img></p>
</div><figcaption><cite>HAKINMHAN / Shutterstock</cite></figcaption></figure>
<p>Apple’s end-of-August stock split is the fifth in the tech giant’s history.</p>
<p>It has a ratio of 4-for-1, which means that Apple shareholders’ portfolios will now contain four times the number of shares they held previously, and each share will now be valued at a quarter of its previous worth.</p>
<p>So, if you owned 20 shares of Apple stock (APPL), valued at around $500 right before the split, your total investment would be worth $10,000.</p>
<p>Once the split is over, you’d own 80 shares of APPL, worth around $125 a piece. Your total investment of $10,000 would stay the same.</p>
<h2>What is a reverse stock split?</h2>
<p>In tough times, a company may decide to do a reverse stock split. As the name suggests, it’s the opposite of a traditional split.</p>
<p>In a reverse split, shareholders get fewer shares than they previously held but at a higher price per share.</p>
<p>So if you held 200 shares in a company that were worth $5 each, after a 1-for-4 reverse split you’d have 50 shares worth $20 each.</p>
<p>Reverse splits typically happen when a company’s share price is at risk of dropping so low that the stock gets kicked off a stock exchange. The New York Stock Exchange, for instance, typically deals in stocks worth a dollar or more.</p>
<h2>What stocks might split in 2020?</h2>
<figure>
<div>
<p><img alt=Quality Stock Arts / Shutterstock” data-src=”https://s.yimg.com/ny/api/res/1.2/C1HimzKRGxkIhqphlq4llA–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/3c2b596b98c65c9cc1ca2939545872b5″ src=””>

Quality Stock Arts / Shutterstock

Although Apple and Tesla (TSLA) may be the two most recognizable brands to split their stocks in 2020, don’t be surprised if other well-known companies follow suit this year.

There are a number of blue chip stocks currently going for four digits a share that could be ripe for a split. Amazon (AMZN) is sitting well above $3,000 per share, while Alphabet (GOOGL), the company that owns Google, is trading at more than $1,500.

Other stocks hovering above $1,000 a share include Chipotle (CMG), AutoZone (AZO) and Booking Holdings (BKNG), the company that owns Priceline.

However, a high price doesn’t guarantee that a stock split is imminent. Berkshire Hathaway, the conglomerate led by billionaire Warren Buffett, has famously never split its main stock (BRK.A), which cost more than $326,600

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China Tesla

China Tesla rival Nio is up 240% this year and the company is revamping plans to go global – CNBC

Bin Li, CEO of Chinese electric vehicle start-up NIO Inc., celebrates after ringing a bell as NIO stock begins trading on the floor of the New York Stock Exchange (NYSE) during the company’s initial public offering (IPO) at the NYSE in New York, September 12, 2018.

Brendan McDermid | Reuters

BEIJING — Once on the brink of bankruptcy, one of China’s largest electric car makers is pressing ahead with plans to expand to Europe and beyond.

Nio, which listed in the U.S. nearly two years ago, is arguably China’s closest competitor to Tesla. Shares of the Chinese start-up plunged more than 80% from their highs last year as financial troubles mounted. Since its public offering on the New York Stock Exchange, several executives, including one of the founders and leaders for Nio in the U.K. and the U.S., have left, in addition to many layoffs.

Then in the middle of the coronavirus outbreak, Nio announced funding talks with the government of Hefei city in southeastern China that later resulted in a lifeline of 7 billion yuan ($1 billion) from investors, including state-backed entities. Meanwhile, vehicle deliveries hit a record 3,740 in June and topped 10,000 for the second quarter overall, according to Nio. Shares are up more than 240% so far this year.

“We hope in the second half of next year we can begin making some preliminary attempts in some countries that are more welcome to electric vehicles,” William Li, founder and chairman of Nio, told reporters on Thursday. That’s according to a CNBC translation of his Mandarin-language remarks. 

“We hope to begin with Europe,” Li said. He declined to name specific countries, but said preparations are already underway for Nio’s plan to enter major global markets by year 2023 and 2024.

The company still has about 200 people working in its U.S. office, down from the roughly 600 at its peak, according to Li. 

Nio still has a long way to go with its global ambitions if it is to match the scale of Elon Musk’s Tesla.

In the second quarter alone, Tesla delivered more than 90,000 vehicles worldwide. Nearly one-fourth of revenue in the three months ended June 30 came from China at $1.4 billion, while about half came from the U.S. at $3.09 billion.

Musk also has his eye on Europe. After expanding operations in China with a new factory in Shanghai, the second gigafactory outside the U.S. is set for Berlin. 

Tesla’s stock has climbed more than 378% this year and topped $2,000 a share on Thursday ahead of a five-for-one stock split for stockholders of record on Aug. 21.

Nio shares closed about 2% lower on Thursday at $13.78 each.

China’s electric vehicle push

The economic shock of the coronavirus pandemic hit a Chinese auto market already struggling from a months-long slump in sales. Automobile sales in the first seven months of the year fell 12.7% from a year ago, with that of new energy vehicles falling 32.8%, according to the Ministry of Industry and Information Technology. 

New energy vehicles, which include pure electric and hybrid cars, posted their first sales increase for the year in July, up 19.3%, the ministry said.

China is the largest automobile market in the world. Beijing has national ambitions to become a global leader in new energy vehicles, while the auto industry overall plays a significant role in the nation’s economy. Soon after the coronavirus outbreak subsided within the country, Chinese authorities announced new policies to support the auto and electric vehicle industries. 

Some of the start-ups that have survived the initial flood of electric vehicle development are also looking to U.S. capital markets. Li Auto listed on the Nasdaq a few weeks ago, while Alibaba-backed Xpeng also filed earlier this month for an initial public offering on the New York Stock Exchange.

Battery subscription plan

The Chinese government is now also allowing companies to sell electric vehicles without a battery, paving the way for Nio to launch a “battery-as-a-service” product on Thursday. The subscription plan reduces the upfront vehicle cost, and can be compared to a regular gasoline charge, Li said. 

Customers who buy the battery plan — which costs a minimum of 980 yuan ($140) a month — can get a discount of 70,000 yuan ($10,000) from a Nio car purchase. The company announced last month its latest model, the EC6, is slated for delivery in September with a pre-subsidy starting price of 368,000 yuan ($52,571). 

To support the new battery product, Nio formed a new battery asset company in Wuhan, China, whose three other investors are: the leading battery developer Contemporary Amperex Technology (CATL), Hubei Science Technology Investment and financial services company Guotai Junan International. Each company is investing 200 million yuan and will have a 25% equity interest. 

Nio’s Li said the battery service plan should give drivers of gasoline cars more motivation to switch to electric vehicles. Even without the new battery product, Li said demand for Nio vehicles was already going up in August. 

The company, which posted a net loss of more than 1.17 billion yuan ($166.5 million) in the second quarter, forecast in its latest earnings release last week that it will deliver 11,000 to 11,500 vehicles in the third quarter. 

Nio also hopes its new battery product can elevate its position in the industry. 

“Our (competitive) benchmark is Benz, Audi, BMW and Tesla,” Li said. “If they’re willing to use (the battery service) then we have no issue because they can afford it. So it’s just a question of whether they’re willing to use it.”

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