By Heather Somerville and Tim Higgins 

Tesla Inc. Chief Executive Elon Musk on Tuesday will host a long-promised event showcasing advances in battery technology, the fuel in the race between the Silicon Valley car maker and rivals to win electric vehicles sales.

So-called Battery Day is scheduled to take place right after Mr. Musk addresses Tesla's annual shareholders meeting, its first such gathering since the pandemic struck, the company's record run of profits and a new production facility in China has come online.

On the eve of the gathering that has been delayed by the pandemic and is taking place online and in-person near the company's lone U.S. car plant in Fremont, Calif., Mr. Musk dropped hints about the challenges ahead. "With our cell suppliers going at maximum speed, we still foresee significant shortages in 2022 & beyond unless we also take action ourselves," Mr. Musk tweeted Monday, even as he said the company also would buy more cells from suppliers.

Tesla has enjoyed a strong run in the face of the global pandemic. The company in July for the first time posted its fourth-consecutive profitable quarter and is poised to deliver its first-ever full-year profit in 2020, according to analysts surveyed by FactSet.

Those results, driven in part by the sale of emissions credits to rival car makers, came despite a temporary shutdown earlier this year of the Silicon Valley electric vehicle maker Fremont plant when regional authorities ordered most businesses to close to contain the spread of the Covid-19 outbreak. Mr. Musk sparred with local authorities and defied public health orders to reopen the plant, at one point daring officials to arrest him. (They didn't.)

The car maker has benefited from the opening late last year of its first overseas assembly factory located in China and from the Model Y sport-utility vehicle rolling off the line in March. The SUV's order backlog secured before the pandemic helped sustain deliveries when many prospective new car buyers were stuck at home.

Tesla in early April stopped reiterating full-year car delivery guidance that called for at least a 36% production boost this year and deliveries of more than 500,000 vehicles. At the time, analysts cautioned Tesla could fall short of its guidance because of the pandemic. Now, they are less certain. Tesla delivered just under 180,000 cars in the first six months, and analysts expect the company to deliver a record 144,000 this quarter and 179,000 in the final three months of the year.

The performance has spurred huge demand in Tesla's stock, which has roughly quintupled this year, and made the company the highest valued car maker, even though its production volume still is far behind the likes of Toyota Motor Corp., Volkswagen AG, or and General Motors Co. In spite of its recent run of profitability, Tesla was passed over for inclusion in the S&P 500 index, disappointing many of the company's bullish investors.

Mr. Musk's ambitions for millions of annual car sales has driven him to further expand the company's production capacity. Tesla is building its first-ever European car assembly plant outside Berlin and has begun work on a second U.S. assembly factory near Austin, Texas.

But Tesla also faces potential challenges, including questions about demand during a global recession given its cars still carry a premium over combustion-engine models, something it has been trying to address by improving its battery technology. And it also operates in an increasingly competitive environment as rivals introduce more electric vehicles.

Write to Heather Somerville at Heather.Somerville@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com

 

(END) Dow Jones Newswires

September 22, 2020 15:46 ET (19:46 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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