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Musk says cheaper Tesla batteries 3 years away

Unhappy investors slashed $50 billion off Tesla's market value Tuesday (September 22) -- after CEO Elon Musk unveiled a new generation of electric batteries at an event that fell short of expectations.

Investors looked for two significant announcements at Musk's "Battery Day" event Tuesday --

The development of a "million mile" battery good for 10 years or more, and a specific cost reduction target that would finally drop the price of an electric vehicle below that of a gasoline car.

But Musk didn't deliver either.

He instead described new, larger batteries under development called 4680 that will help drive down vehicle cost -- but not for at least another three years.

"It sounds, I think it may sort of sound a bit silly to some people, but this was, this is, like for people for really know (battery) cells, this is a massive breakthrough."

To help minimize vehicle cost Musk said Tesla planned to recycle battery cells while reducing cobalt -- one of the most expensive battery materials -- to virtually zero.

It also plans to manufacture its own battery cells at several highly automated factories around the world.

While average electric vehicle prices have decreased in recent years, they are still more expensive than conventional cars, with the battery estimated to make up a quarter to a third of the cost.

But as automakers shift from horsepower to kilowatts to comply with stricter environmental regulations, investors are looking for evidence that Tesla can increase its lead in electric cars -- over legacy automakers who generate most of their profit from combustion-engine vehicles.

They must now wait and see if Tesla will follow through on its promises to ramp up battery production, eventually hoping to build as many as 20 million electric vehicles a year.

The company has frequently missed production targets set by Musk.