Tesla Motors Inc will unveil its long-awaited Model X tonight at 8pm Pacific Standard Time. Tesla’s Model X was first announced in Feb. 2012 and the plan was that it would ship out by the end of 2013. Two years later, issues in design and production were still delaying the car. Despite the delays, Tesla has been able to book almost 30,000 reservations.
The drop in global oil price has reduced the selling point of EVs because of cheap gasoline prices but Tesla pricing has been largely unaffected. Its cars are premium-priced and the Tesla Model X Signature Series will be topping out at somewhere around $132,000.
But how about the standard pricing? CEO Elon Musk gave us a good idea on that in a series of tweets in early September saying, “with the same options, Model X is $5k more than an S due to greater size & body complexity. Sig Series is fully loaded, hence high price.” Pricing on the Model S begins at $75,000, so we can assume a base price of around $80,000.
However, price is the least cause of concern for Model X buyers; all they want to know is whether the Model X delivers an EV worthy of a two-year delay.
What to expect tonight
Tesla Motors CEO Elon Musk is known for two things when it comes to product introductions. A late start and a brief announcement.
Tonight, it’s possible we may be watching the delivery of the first Model X. It’s almost certainly going to be a fully loaded Signature Model.
What nearly 30,000 reservation holders and buyers will be most interested in learning is when they will be getting their vehicles. This is where things could get sticky. If Musk can say that production of the car is on track and that thousands will be manufactured and delivered by year end, he will make a lot of people very happy. If he announces any delays in delivery, both buyers and stockholders will be disappointed and that could hurt Tesla at least temporarily.
Nobody outside of Tesla knows exactly what they’re getting in the Model X – buyers have had to make do with teasing images and hints on its specs.
We know the Model X has very unusual Falcon Wing rear doors with built in sensors that allow for safe opening in garages of any height. Last week video was leaked showing the Falcon Wing doors in action. Like all Tesla EVs the Model X will have free access to the highly developed network of Superchargers allowing for virtually free long distance driving. And as an upgrade, Autopilot with Traffic Aware Cruise Control, Lane Keeping with Automatic Steering, Self-Parking and Auto high/low beam headlights.
The market will decide if the Model X was worth the wait
Now, the market will get a chance to have a hands-on time with the Model X and Tesla is in no doubt at an important junction in its growth story. Shares of Tesla closed down 3.30% at $248.43 in Monday’s session as an indication of the precarious position that the firm occupies as the market awaits the Model X.
Much of the success that Tesla has recorded in the last one year can be traced to the hype surrounding the Model X. The Model X is important to the reputation of Tesla to counter critics who think that the success of the Model S was a fluke. Model X needs to impress for the firm to reinforce its position as a serious EV maker and not a passing fad.
Tesla currently has a market cap of $34B even though it operates at a loss and it only sold 32,000 cars last year. In contrast, General Motors who runs at a profit while selling more than 10 million cars last has a market cap of a mere $48B. Tesla commands its high price because the market believes that it owns the future, if the Model X fails, investors might change their views and it won’t be nice to see the firm valued on the basis of its operating losses and its 32,000 annual sales.
How will Tesla fare tomorrow?
Shares of Tesla have climbed by 34.29% in the last six months. However, as the launch of the Model X drew nearer, the firm lost 6.99% in the last three months. By this time tomorrow, the market would have had a chance to judge if the two-year delay of the Model X was worth it and if the car can help Tesla sell 50,000 cars by the end of this year and 500,000 cars annually by 2020. If the market is convinced that the Model X has lived up to its hype, you can expect the positive outlook for Tesla to be revived.