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Battery day starts on a low note with Musk’s warnings

Tesla’s big day - Battery day - was set to start on a high note on Tuesday, but unexpected tweets from the CEO - Elon Musk - had many investors worried about production of new cars from the company. Yahoo Finance’s Rick Newman joins The Final Round's Seana Smith and Myles Udland to discuss what to expect from Battery Day.

Video Transcript

SEANA SMITH: All right, guys, moving on to another stock that we talk about all the time here on the show. Tesla shares under pressure today, closing off just around 5%. Rick Newman, a big evening here for the company. We know-- we've been talking about their Battery Day now for months. It's here, it's going to get underway in just around 10 seconds from right now.

The stock under a little bit of pressure today after Elon Musk kind of dampened the outlook a bit in terms of what we should expect. But I'm curious just to get your thoughts just on this change in tune, and also how significant you think this is going to be for Tesla going forward.

RICK NEWMAN: My very first thought is, be skeptical of whatever we hear today because Tesla, like other companies, including other automakers, does have a habit of exaggerating and sometimes overstating what it's got in hand.

Now, what analysts are looking for here are, are there any meaningful breakthroughs that Tesla has to talk about in terms of all different elements of battery technology, whether energy, density, whether the chemicals that make the battery work, whether that-- you know, anything that would allow them to produce a cheaper and smaller battery would be important.

And the bumper sticker here is a million mile battery. Now, that means a battery that can last a million miles in a car which is not really that important for a car buyer, because nobody wants to own a car for a million miles or even drive a million miles. But that battery in theory, if you drive your car for 100,000 miles, well, the battery can be either-- continue to be used in the car, or used for other purposes.

So it-- so it would extend the life of these batteries and sort of improve the economics of the batteries. But what everybody's looking for here, is there anything that is going to-- that is going to sort of move battery technology forward? Because that is the thing that is holding back adoption of electric vehicles.

And one-- one last thing I'll just throw into this long disposition is, Morgan Stanley even suggested it might be in Tesla's interest to open its-- do open source technology with its batteries so that other automakers can adopt the batteries. And that might actually speed the evolution of electric vehicles. So that's the umbrella of things that people are looking for. We'll see how many of those things we actually hear about later today.

INES FERRE: Hey, Rick and what about Elon Musk's tweet sort of dampening the expectations, or basically setting more realistic expectations, talking about high volume production for 2022. Do you think the Street is that concerned about when they get to scale these new batteries if this new battery's being unveiled today, and-- and what the timeline is for scaling production?

RICK NEWMAN: I have no idea what to make, ever, of any Elon Musk tweet or anything he says ahead of a big event like this. So on one hand, Tesla really hypes these events and they make it sound-- you know, everything Tesla talks about, they make it sound like it's breakthrough technology when in reality, some of it is but some of it isn't. Their self-driving technology, for example, is not nearly as advanced as the company would have you believe.

So you know, Elon Musk, he did talk down what might come later today, earlier this morning. And that is part of the reason the stock was off today, I think a little more than 5%. Of course, it's a very volatile stock. It could easily gain that back and more tomorrow if the market likes what it sees. It's hard to tell what technology breakthroughs Tesla has until this technology actually makes it into the cars and gets on the road. So there's a big difference from what Tesla or any automaker can say they have in a lab and what's actually going to make a difference on the road.

SEANA SMITH: Well, the battery event getting underway now. Tesla shares already rebounding a little bit after today's sell, up just around 1% here after hours.