Tesla won’t produce the Model X until it’s sufficiently awesome
Elon Musk would rather wait to put out an eagerly awaited product than push one out that’s not awesome.
That was apparent from the language used in Tesla’s Q3 newsletter, published Tuesday (emphasis ours):
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.
In anticipation of this effort, we now expect Model X [the company’s forthcoming SUV] deliveries to start in Q3 of 2015, a few months later than previously expected. 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.
Tesla’s earnings beat analyst’s expectations, but some weren’t impressed by the pace of deliveries by the luxury electric-car maker. Tesla said it would deliver about 33,000 vehicles in 2015, lowering its estimate by 2,000. John Thompson, CEO of Vilas Capital Management, said on CNBC’s “Closing Bell” program that Tesla is “grossly overvalued … A company making 33,000 cars is worth half of Ford Motor Company today.”
Still, Tesla’s stock closed at $240.20 Friday, down 98 cents for the day, but up from $230.97 since Tuesday’s earnings report. Ford closed at $14.17, down 2 cents.
(Photo: Darren Brode, Shutterstock)