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Tesla Motors Inc (NASDAQ:TSLA) Halts Factory Tours, Model X Production Begins

Tesla Motors Inc Model-X
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Tesla Motors Inc (NASDAQ:TSLA) has halted tours of its factory in Fremont California. Elon Musk’s firm is usually very open about having owners and prospective buyers visit the production line where the Model S is made. The shut down can only mean one thing: the firm is getting ready to begin producing the Model X SUV.

Tesla Motors Inc Model-X

The Model X is slated for its first delivery some time before the end of the third quarter. With just four weeks left until September, that means the car will have to begin test production right about now. We know that Tesla Motors began training staff by the end of June. Now it looks like the firm is ready to reset the factory in order to make the Model X.

Tesla Motors closes factory to public

Zachary Shahan of Gas2.org says that tours of the firm’s factory in Fremont have been shut down for the time being. It makes sense to close down a factory in order to prepare for the start of Model X production, and the timing seems right.

Mr. Shahan cited a couple of anecdotal reports, from those who claim sources inside the Tesla Motors (NASDAQ:TSLA)  factory in Fremont, to support the idea that the Model X was finally set for production. The bottom line is that a factory re-work was coming in order to put the Model X line together.

Tesla offers tours of its factory in Fremont to owners of the Model S and sometimes to those that test drive the car near the factory. Tours from large companies, university alumni and other groups are common, and sometimes members of the public can be invited to tag along.

Members of the public aren’t allowed to organize those tours by themselves, but Tesla has been open enough to allow many kinds of people to go through its factory with relative ease.

The timing of the halt for guided tours of the factory seems right, and it’s likely that workers at the factory are finally getting ready to build a car first promised in 2012.

Tesla Motors hides from the public eye

The Fremont factory tours have been a focal point for Tesla Motors (NASDAQ:TSLA)  fans looking to catch a glimpse of the firm’s next car. It seems that Elon Musk has decided now is the time to hide from the lime light. There’s a good chance that this is because of safety concerns rather than an attempt to hide the pieces of the Model X from the public eye.

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Tesla Motors is very open about its patents, but the firm still has a lot it wants to hide from the public. Trade secrets, of the sort that might be out in the open while the firm breaks down and builds up its factory lines, are guarded closely by Tesla Motors.

The firm likely doesn’t want anybody to see how it’s putting its production line together, or the kind of testing it’s doing on the Model X as it ramps up for full production of the car. Tesla Motors has been silent on the final specs of the Model X, and it seems that the firm is waiting until it’s ready to ship the car before revealing key details.

Get a free Model X

Meanwhile Tesla Motors (NASDAQ:TSLA) has started up a referral program that will allow a few fans of the Model X to get their hands on one for free. The first person to get ten people to buy a Model S through the program in each of the firm’s three sales regions will be able to get one of the Founder Edition Model X SUVs for free.

The timing of the announcement of the referral program doesn’t mean all that much, as there’s likely enough wealthy Tesla Motors fans out there to get ten sales long before the first Tesla Motors Model X leaves the factory line.

The Founder edition Model X units is likely to be the first delivered. Those that manage to get ten referrals are likely to get their Model X before those that booked it in the last year or so.

The first run of any new car, even those made by Tesla Motors, takes much longer than the later runs. The first Model X units off the line are likely to have flaws that will be studied and fixed in order to reduce the rate of imperfections in the later units of the EV SUV.

Counting down the days until Model X

The actual release date of the Model X isn’t known just yet, but Elon Musk has said that the first delivery of the car will be the launch. Tesla Motors isn’t going to do a show case for the Model X before it’s ready to start sending the EV SUV to doors.

Most of Wall Street is very bullish on the Model X, but few think that Tesla Motors will be able to sell the car en masse before the end of the year. Adam Jonas of Morgan Stanley says that he expects the firms to sell 50 units in the third quarter and just over 5,000 by the end of the year.

Ben Kallo of Baird is more optimistic. He sees the firm selling around 7,000 units of the car before the end of the year. 20,000 Model X bookings have already been taken by the firm. It’s going to take at least until the end of the first quarter of next year to clear that backlog.

Traders have been a little bit jumpy about Tesla Motors in recent days. Shares are down by more than 2 percent for the last month. On today’s market shares have been steady at just over $262. The firm’s shares hit a local high of more than $285 on July 20.

It seems clear that the Model X is ready to go onto, and eventually come off of, the factory line, however, and some news should come from Tesla Motors (NASDAQ:TSLA) in the next few weeks. You can never be sure when it comes to the firm, and the Model X has proved a challenge in a number of ways since it was first announced in 2012.

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Paul Shea

1 Comments

  1. I find it very encouraging that Musk is allowing a full month for “changeover.” He’s making sure everything goes well, even at the sacrifice of a few Model S deliveries. This commitment to quality will pay off big dividends shortly…when we see Model X’s rolling down the road in unexpected numbers. Personally I think this will be a turning point.

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