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Tesla’s highly anticipated battery technology day has arrived. And as more auto makers announce plans to transition to an all-electric future, one analyst believes Tesla might use today’s event to give away its battery technology to the competition.

Whatever

Tesla

(ticker: TSLA) and Elon Musk disclose Tuesday evening, the entire automotive industry will be watching. The pace of battery development is an existential issue for the sector.

Cheaper batteries—from factors such as new chemistry or manufacturing improvements—means more electric vehicles could hit the roads faster. As Morgan Stanley analyst Adam Jonas puts it: “If Tesla is able to prove a step change cost down in battery prices …[it] could catalyze industry analysts….to contemplate a higher telemetry of EV adoption.”

Jonas also believes investors should be ready for Musk to offer Tesla battery intellectual property to other car companies—for free.

It might seem counterintuitive, but Jonas thinks it fits with Tesla’s ultimate goal of creating a more sustainable future. It could also accelerate the adoption of electric vehicles, something that can benefit Tesla too. About 2% of the new cars sold globally in 2019 were battery powered.

Tesla didn’t immediately comment on Jonas’s report.

Jonas rates Tesla shares the equivalent of Hold and has a $272 price target.

That’s far below $430, where Tesla stock is trading Tuesday morning. Shares are up about 430% year to date, exceeding comparable returns of the

Dow Jones Industrial Average

and

S&P 500

as well as traditional automotive peers. Tesla is now the world’s most valuable automotive stock, by a wide margin.

Tesla is also one of the world’s most valuable companies regardless of sector. Its $420 billion market cap, as of Monday’s closing price, makes Tesla the eighth largest company in America and larger than well-known firms such as

Walmart

(WMT),

Mastercard

(MA) and

Verizon

(VZ).

Tesla stock, however, is down 4.1% Tuesday after Musk’s tweets Monday evening seemed to temper battery day expectations.

In a series of three tweets Monday, Musk spelled out that new technologies wouldn’t be ready for commercial production until 2022 and Tesla would likely increase its battery purchases from third-party vendors including current Tesla partner

Panasonic

(6752.Japan).

“The extreme difficulty of scaling production of new technology is not well understood,” added Musk in one of the tweets. “The machine that makes the machine is vastly harder than the machine itself.”

The stock is down, but investors shouldn’t be surprised with volatility. Tesla is many times more volatile than a typical S&P stock.

One way to measure volatility is to look at stock options pricing. A call option with a strike price near where Tesla shares trade can cost up to 20% of the underlying stock price. A similar call option in, say,

3M

(MMM) costs 70% to 80% less.

Tesla’s battery event begins after the company wraps up its annual shareholder meeting. The annual meeting starts at 4:30 p.m. eastern time.

Write to Al Root at allen.root@dowjones.com