Tesla traders bet on Musk battery pitch to spark rally

Fasten your seatbelt, because Tuesday is Tesla's "Battery Day", and some investors expect Chief Executive Elon Musk's pitch on the electric car maker's energy storage advances to re-energize its rally following a recent 21 per cent stock slump.

Tesla's stock has risen in recent sessions ahead of the event scheduled for Tuesday after the close of trading. Many analysts expect Musk to unveil battery improvements extending the Palo Alto, California automaker's lead over General Motors, Volkswagen and other rivals.

Tesla options are pricing in a stock move of around 17 per cent - up or down - by Friday, said Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group.

Tesla's stock has more than made up for a historic slump on Sept. 8 after it was unexpectedly left out of a group companies joining the S&P 500, and it has surged over 400 per cent year to date. Still, Tesla remains below its Aug. 31 record high close.

Analysts, including those with neutral ratings on Tesla's stock, expect major advances from Musk.

"We (and the market) expect the announcements to be significant, cementing Tesla's cost and technology lead for several more years," UBS analyst Patrick Hummel wrote in a client note on Sept. 11, adding he expects a new dry electrode cell technology to help speed manufacturing and lower costs.

Batteries make electric cars cost more than gasoline-powered ones, so the ability to produce low-cost, long-lasting batteries could put Tesla cars on a more equal footing and help usher in mainstream acceptance.

Musk in August suggested on Twitter that Tesla may be able to mass produce batteries with 50 per cent more energy density in three to four years, which could even enable electric airplanes.

A much hyped "Autonomy Investor Day" in April last year failed to stop a five-month decline in the company's stock.