Tesla Motors Inc (NASDAQ:TSLA) held a big launch event for the Model X SUV on Tuesday, but for the thousands of people out there waiting on the car it seems that we’re still a long way away from a real release date. That’s not quite a problem for the firm just yet, but unless real shipments of the car begin soon, those with shares may begin to worry about the state of Tesla Motors.
In the wake of the event, which seemed a little slapdash and last minute, it became clear that Tesla Motors isn’t really read to make the Model X en masse. The firm shipped the first units of the car on Tuesday, but there seems to have been fairly clear targets on who got them.
Who got the Tesla Motors Model X?
Here’s a look at who got the Tesla Motors Model X on Tuesday:
Vin #1 Elon Musk, CEO Tesla Motors.
Vin #2 Steve Jurvetson, board member of Tesla Motors, investor and first Model S owner.
Vin #3 Mark Templeton, Tesla Motors fan and early Roadster owner.
Vin #4 Sergey Brin, long time friend of Elon Musk and Tesla supporter.
Vin #5 Ira Ehrenpreis, member of Tesla Motors board of directors
Vin #6 Mark Tebbe, early Tesla Motors investor.
These, the founder editions of the cars, could be expected to go to people who are very close to Tesla Motors. That’s sort of the point of a Founder’s edition. It is important to note, however, that they are invested in making sure the business, as well as the Model X, is a complete success.
Tesla Motors meets a deadline
It seems that the Model X is still in artisnal mode at Tesla Motors, and Elon Musk’s team may not have even figured out all the kinks with the car just yet. Mr. Musk is famous for his inability to meet deadlines. The Model X was supposed to be shipped for the first time more than two years ago. Since late in 2014, however, Mr. Musk has stood on his forecast that the first units would ship before the end of the third quarter.
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With a little over 24 hours before the quarter ended, Mr. Musk delivered no more than six units of the Model X to some close friends of Tesla Motors. He met the deadline he set in 2014, but the display may have been more of a facade than anything else.
We know that the Tesla Motors (NASDAQ:TSLA) Model X is hard to build. Elon Musk keeps telling the world just that. We also know it’s likely to be broken in a couple of hundred ways for the first year or so. Many early Model S owners had big problems with their car. Tesla Motors fixed those issues, and the Model S is much better as a result.
With the Model X launch being the way it was, however, Tesla Motors could have sent cars with a litany of issues to the Founders. Steve Jurvetson or Ira Ehrenpreis aren’t going to go to the media to complain about the car. They’re invested in the business, and in the future of the Model X.
The real question is when will Tesla Motors get the Model X to some real people? The firm could rest on its laurels and not get the first real Model X to owners for another six weeks, or it may already have started to ship the car.
Given the nature of the event on Tuesday, however, it seems more likely that Tesla Motors is lagging on the Model X, but it tried to meet the deadline in spite of that.
Slowing down Model X production at Tesla Motors
There are about 25,000 people waiting on the Model X right now. Tesla Motors is going to take a year or so to get rid of that backlog according to Elon Musk. We know that the process is going to be slow, and in the firm’s most recent earnings call, back on August 5, Elon Musk said that he didn’t expect to ramp up production of the Model X until very late it the fourth quarter. That means that the car will remain artisnal for a few months to come.
Despite being made on a low volume line, Tesla Motors will need to start shipping real models of the Model X soon. If it doesn’t Wall Street, already nervous because of China’s sinking economy, may start to get very worried indeed about the state of things at Tesla Motors.
In the last three months shares in Tesla Motors have lost more than 14 percent of their value, but the firm still attracts huge price targets from Wall Street. Now that the first hype about the Model X is over, it needs to follow through and get an actual car to actual people to justify those targets.
Looking for the Model X release date
Tesla Motors (NASDAQ:TSLA) is a black box and we’ll have to wait until the firm reports its numbers before we can see what’s going on at Fremont. Elon Musk may have to lower his shipping estimates for the full year if there are real problems with the Model X. He already did that the last time Tesla published earnings.
Tesla Motors is trying to prove to Wall Street that it can turn itself into a real car firm. The launch of the second car in its line up was a chance to do just that, but Tesla Motors didn’t get there. Instead the firm squeezed out a handful of cars and gave them to people who certainly won’t appraise them critically.
We’ll likely have to wait weeks, if not months, to find out how the Tesla Motors Model X really is. The first thousand or so people on the firms waiting list will expect to get their car before the year ends.
If Tesla Motors can clear that hurdle and ship a couple of thousand units of the Model X before the holidays, Wall Street may be happy. If it fails to reach that promise land, the firm’s stock, which has been falling since Mr. Musk handed the keys to Ira Ehrenpreis, may suffer in 2016.