40% price drop on chinese ev batteries spells trouble for tesla - lifepo4 battery pack

The cornerstone of Tesla's story could collapse, as there are signs that the company's envisioned battery price advantage could disappear long before the company's gigafactory fully unfolds.
An analyst at Morgan Stanley reported that Chinese battery suppliers could cut prices by 35%.
40%, while still making profits in 2017.
Shares of Samsung SDI, an electric-vehicle battery maker, fell 4% in the news on Thursday, while shares of rival LG Chem fell 1. 8%.
Tesla stock price did not change after the platehours trading.
Morgan Stanley analyst Sean King said in a report quoted by Barrons: Morgan Stanley thinks this is negative for Samsung SDI and LG Chem, South Korea's electric vehicle battery suppliers,, any sharp price erosion on the front of the battery will jeopardize the viability of Tesla's gigabit plant in Reno, Nevada.
The success of this business depends on two factors: Tesla can sell enough electric vehicles (
And some fixed batteries they call Powerballs)
Keep this huge factory busy.
And Tesla's ability to make batteries at less than the price offered by the supplier.
Three years ago, when Tesla offered investors the idea of Geely, a 30% price advantage was envisioned.
Tesla's forecast has not changed since then.
The company's website still says the company expects "every kilowatt hour (kWh)
The cost of our battery pack is over 30%.
Of course, Tesla, which is not covered up
Dan Dolev, founder of Jefferies, expects the Gigabit plant to save more than 50% by 2020.
He also set a $365 target for Tesla's share price in 2015.
On the other hand, MIT's technical review spoke to experts who recognized Tesla
By 2020, residential battery production had a cost advantage of only 15%.
Regardless of your position on this issue, if the electric vehicle battery price in China this year is much lower than the price produced in 2020 in Nevada at the gigatford plant, with it, the cornerstone of Tesla's strategy and the huge valuation are in serious trouble.
At the same time, even the most ardent fans
Battery production in the House now says it's a bad idea.
A week before Christmas, Carlos Ghosn
The CEO of Nissan and Renault, the owner of several battery factories, told me that these days, if you can buy batteries at a lower price from a willing supplier, it's stupid to make your own battery as it stands, Tesla is preparing to invest $4 in the bln Gigafactory to make the old technology more reliable
Fire of disaster.
To make matters worse, the Morgan Stanley bill is the most brazen of Tesla supporters.
However, Morgan Stanley began lowering its gains last year.
A little colored glasses. P. S.
Morgan Stanley doesn't seem to think the news is bad for Tesla.
A few hours later, the broker upgraded Tesla's rating from "equal weight" to "overweight ".