Investors slashed $50 billion from Tesla's market value despite CEO Elon Musk's promise to cut electric vehicle costs so radically that a $25,000 car that drives itself will be possible - but not for at least three years. 

Tesla's market cap dropped $20 billion in just two hours after trading closed on Wall Street last night, as Musk and other Tesla executives presented their new battery and manufacturing strategies.

Shares fell again in afternoon trade today.

Investors had expected two significant announcements at Musk's oft-touted "Battery Day".

The first was the development of a "million mile" battery good for 10 years or more, while the second was a specific cost reduction target - expressed in dollars per kilowatt-hour - that would finally drop the price of an electric vehicle below that of a petrol or diesel car. 

Musk offered neither.

Instead, he promised over the next several years to slash battery costs in half with new technology and processes and deliver an "affordable" electric car. 

"In three years we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car," Musk said. 

Musk acknowledged that Tesla does not have its ambitious new vehicle and battery designs and manufacturing processes fully complete. Tesla has frequently missed production targets set by Musk. 

Tesla expects to eventually be able to build as many as 20 million electric vehicles a year. This year, the entire auto industry expects to deliver 80 million cars globally.

Building an affordable electric car "has always been our dream from the beginning of the company," Musk told an online audience of more than 270,000.

Tesla yesterday introduced a new Model S Plaid, a 520-mile range saloon that can reach top speeds of up to 200 miles per hour (320 km per hour), with deliveries starting in 2021. The Plaid was listed on Tesla's website at a price of nearly $140,000. 

At the opening of the event, Musk walked on stage in a black t-shirt and jeans as about 240 shareholders - each sitting in a Tesla Model 3 in the company parking lot - beeped their car horns in approval. 

To help drive down vehicle cost, Musk described a new generation of batteries that will be more powerful, longer lasting and half as expensive than the company's current cells. 

Tesla's new larger cylindrical cells will provide five times more energy, six times more power and far greater driving range, Musk said, adding that full production is about three years away. 

To help reduce cost, Musk said Tesla planned to recycle battery cells at its Nevada "gigafactory," 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. 

Tesla will produce the new battery cells initially on a new assembly line near its vehicle plant in Fremont, California, with planned output reaching 10 gigawatt-hours a year by the end of 2021. 

Tesla and partner Panasonic now have production capacity of around 35 gWh at the Nevada battery "gigafactory." 

The company aims to rapidly ramp up battery production over the next years, to 3 terawatt-hours a year, or 3,000 gigawatt-hours - roughly 85 times greater than the capacity of the Nevada plant. Musk also said Tesla could supply batteries to other companies.  

As car makers shift from horsepower to kilowatts to comply with stricter environmental regulations, investors are looking for evidence that Tesla can increase its lead in electrification technology over legacy automakers who generate most of their sales and profits from combustion-engine vehicles. 

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

Some researchers estimate that price parity, or the point at which electric vehicles are equal in value to internal combustion cars, is reached when battery packs cost $100 per kilowatt hour (kWh). 

Tesla's battery packs cost $156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors.