Shares of Asian battery suppliers fell on Wednesday after Tesla Inc unveiled a plan to halve the cost of its electric vehicle batteries and bring more production of the key auto component in-house.
The fortunes of battery makers in South Korea, Japan and China are linked to Tesla, the EV market leader, supplying its factories in Nevada and Shanghai.Tesla CEO Elon Musk on Tuesday outlined a plan at the company's closely watched"Battery Day" to aggressively boost production of its own batteries and cut battery costs as it looks to deliver affordable electric cars.
Analysts said Tesla's plans could limit longer-term sales growth of suppliers to the market leader, while Musk's comments indicated the company will put pressure on suppliers to lower prices. Tesla said the company has started ramping up production of its new batteries at a pilot line in Fremont, California, but productivity is not high and Musk acknowledged the difficulty in scaling up production.
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