Tesla Motors Inc stock is in trouble. The release of the Model X didn’t exactly go as Wall Street wanted, and Consumer Reports no longer recommends the Model S for purchase. Those are major problems for the EV maker, but boss Elon Musk isn’t letting that get him down. On Thursday morning he went out of his way to make promises about the future of the firm.
Here’s a look at exactly what Elon Musk said Tesla Motors was planning to do in the near future. None of it is exactly ground-breaking stuff, but it’s all worth noting as the firm strives to become more like a real car seller, and less like a glitchy tech start up. That’s a change that Wall Street really wants to see sooner rather than later.
Model S reliability will improve, and it already has
Mr. Musk, in a direct response to claims from Consumer Reports that the Tesla Motors Model S has real problems with reliability, says that the sample included a large number of older units.
He said that most of the problems noted in the survey have been fixed in newer versions of the Model S. That takes away a little from the credibility of the Consumer Reports research. The outlet didn’t differentiate between versions of the car in its publication, though Tesla doesn’t really do that either.
The firm could release its own numbers for reliability in order to make the situation clear, but for now we’re going to have to take Elon’s word that the problems with the Model S have been fixed. The big question is how the Model X will function when it finally hits the road.
Tesla Motors Autopilot hits Europe tomorrow
Elon Musk reckons that Autopilot will arrive in Europe this Friday, though it’s not fully certain if he means tomorrow or next week. That statement is a little weird. Elon Musk said on October 19 that the release outside of the US could take “weeks” as the firm ran into problems with unnamed regulators. Mr. Musk’s tweet pointed only to a hope that the update would arrive on Friday, so don’t be surprised if it take a little bit longer to show up.
Autopilot has been the major bright spot in the dark days since the Model X launch event for Tesla Motors. Drivers in the US have, more or less across the board, said that the feature works as described. Many are very happy with the pressure it takes off on long drives, though there has been some issues getting used to the process.
Europe, and some of the continent’s countries in particular, is a key market for Tesla Motors as it seeks to expand. The firm will need the markets there, which often offer decent price supports for EV buying, in order to grow into its 500,000 per year sales target.
Autopilot should be a key driver for demand, and as soon as it arrives, the sooner it can start getting better. It will be very interesting to see how the tech manages in the UK where drivers drive on the left. It’s surely not a matter of simply swapping the self-driving software around, and Tesla Motors may have to put more work in to deal with that problem.
Tesla Motors will enter the Middle East, Mexico and South America
In two separate tweets Elon Musk told people from around the world that Tesla Motors would soon extend its reach beyond North America, Europe and East Asia. To a user who asked for a service center to be opened somewhere in Latin America Musk responded, “planning to have a big opening in Mexico City soon and then proceed gradually to central and South America.”
Another user asked about when Tesla Motors might deign to come to the Middle East. Elon Musk, generous as he was with info, said that the firm is “already in Jordan. Rest of states in region next year.”
A bad reliability score in Consumer Reports isn’t going to kill Tesla Motors, and it’s good to see that the firm is still pushing ahead with its global rollout. Once the firm manages to boost its production, it will need a global sales team in order to hit its massive forward targets.
Fans asked to help design Update 7.1
Tesla Motors got Update 7.0, which included the first self-driving features, out to Model S owners in less than good time, and it appears it’s going to be quite a while before the rest of the promised features arrive. In a tweet this morning Mr. Musk promised to take user feedback into account in making the UI changes that will come through with update 7.1.
Mr. Musk asked “What esthetic and functionality improvements would you like to see in the 7.1 UI overhaul? Or new features entirely?” There’s a few features that Model S drivers have been looking for, including garage parking and summoning, that were thought to be part of update 7.0.
Since Elon Musk is now promising to “write up a list of software priorities in the coming weeks” it seems that we’ll be waiting a long time for update 7.1 to hit the Model S. That means no summoning the car to the door or asking it to park itself just yet.
Dealing with Tesla Motors problems
Those with shares shouldn’t be looking for Tesla Motors to be able to solve its major problems any time soon. Elon Musk doesn’t get much sleep as it is, and right now his firm is facing one of the more challenging periods in its history.
We don’t know when the first Model X, outside of the Founders units shipped at the launch event, will arrive, and many on Wall Street seem sure that Tesla Motors could miss its targets for shipments in 2015.
We don’t know whether the Consumer Reports reliability change will have any effect on demand for the Model S and Model X. We don’t know what it would take to reverse the decision, or when it’s likely Tesla Motors will have a chance to get that blessing back.
What we do know is that Tesla Motors is the same firm it was before the Model X launch and the crash of the stock. It has huge problems with building its cars, and it’s slow to start doing so. That’s to be expected from a new car firm, and the risk should have been priced in by all of those putting cash behind Elon Musk.
It’s clear now that those risks weren’t priced in, or at least not well, and many have fled the stock seeking safety from the market turmoil. These issues aren’t likely to get in the way of Tesla Motors, however, and the firm is still sticking with its major development plans.
The only thing that’s going to stop Tesla Motors is running out of cash. We’ll be able to judge the firm’s progress on that front as soon as it releases its third quarter earnings numbers. That’s coming on November 3, and the call with investors is a great platform, better even than Twitter, for Elon Musk to explain his plans to Wall Street, and the world.