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Tesla Delays Launch of Model X Until Q3 2015
An anonymous reader writes "Tesla on Wednesday announced that it was pushing back the release of its highly anticipated Model X until the third quarter of 2015. Explaining the delay, Tesla relayed the following in its quarterly shareholder letter: "Work continues on the finalization of Model X with the testing of Alpha prototypes and initial builds of the first Beta prototypes. Model X powertrain development is almost complete with the early introduction of Dual Motor drive on Model S. We recently decided to build in significantly more validation testing time to achieve the best Model X possible. This will also allow for a more rapid production ramp compared to Model S in 2012." During Tesla's subsequent earnings conference call, Tesla CEO Elon Musk shed a bit more light on all things Model X, including the fact that if you order one today, it won't arrive until early 2016.
Forbes goes into more on the business end of what's caused delays for the company, as well as how investors should see it (critically, they say).
Tesla struggles with scaling. They talk about how the demand is greater than their production capacity. which is OK in a niche market but a bad thing in a major competitive market. They are losing money with their existing scale, and it is not clear how much it will cost to scale up significantly. They may take quite a long time to become profitable, or they may never make it to that point, it is still unclear. What makes it a risky investment, in my opinion, is the fact that once the production/price/market variables become favorable for the technology, the big companies will be able to scale it at a much lower cost, as that is what they are good at. That is where the battery manufacturing thing become critical for Tesla's sustainability.
What makes it a risky investment, in my opinion, is the fact that once the production/price/market variables become favorable for the technology, the big companies will be able to scale it at a much lower cost, as that is what they are good at.
I very much doubt that Tesla is going to outsource its manufacturing for key components. It is going to keep those in house, and it will be expensive in the near future, but they will not have worry about competitors getting cheap access to those components. Too many of the current car companies are focused upon assembling a car; they are not engineering huge advantages in technology or going in new directions.
Tesla is going to have these guys beat for no other reason than they are going to sit on their hands until it is too late. If you want a better explanation, they are going to have engineer their own product and manufacturing of specialty parts. They don't seem interesting in committing to electric cars now and when Tesla is big enough to be mainstream it will still take them 3 to 5 years to get their own product out the door.