The many thousands of reservation holders for Tesla’s Model X had rumors and an analyst’s conjecture confirmed yesterday as production will be delayed until the third quarter of 2015.
In 2012 we reported Tesla would begin deliveries the end of 2013, but then in March 2013 when Tesla repaid its $465 million loan early it also pushed it to late 2014. After that, it became first quarter of 2015. And as of yesterday’s shareholder disclosure of Q3 2014 earnings Model X was announced as due for Q3 2015
Tesla’s delay was centered around many irons in the fire, to say the least.
“Work continues on the finalization of Model X with the testing of Alpha prototypes and initial builds of the first Beta prototypes, said Tesla’s shareholder letter. “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.”
Its Model X delay also prompted an analysis piece in Forbes saying Tesla is falling behind in manufacturing and starting to look like Detroit automakers in this regard.
For its part, Tesla conceded the company could be validly criticized.
“This also is a legitimate criticism of Tesla – we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term. There are many other companies that do not follow this philosophy that may be a more attractive home for investor capital. Tesla is not going to change.”
Forbes noted Morgan analyst Adam Jonas had predicted Model X would be delayed until the third quarter last month.
Jonas cited four reasons in his note to investors why Model X would be postponed again.
1) Major launches are often delayed, even if Model X had been delayed more than others; 2) Pre-production prototypes were not being sufficiently seen testing on public roads; 3) Model S with all-wheel-drive was a surpise announcements, and Tesla could want to put a time gap between it and X; 4) Model X will be more special technologically, more complex, and Tesla will want to do it right.
This latter observation especially was confirmed by Tesla’s CEO.
“I do think the X is going to be quite special, but it’s harder to engineer and it’s hard to produce.”
Tesla also updated its website yesterday.
The P60D all-wheel-drive is not yet available, and the P85 was deleted, being substituted for the all-wheel-drive P85D starting at $105,670.
And of course, reservations are still being taken for Model X.