Tesla Motors Inc is in trouble with the Model X, and the firm knows it. Despite opening up the online design studio to each and every person that has booked the car so far, only a handful of EV SUVs have been delivered. According to self-reported ownership on Twitter, likely not the best metric, only 13 units of the car have been delivered. That’s not the only delay that Tesla Motors is facing, however.
It seems that Tesla Motors has changed its plans for the roll out of the Supercharger this year, though the changes aren’t all that dramatic. Tesla won’t be able to build as many stations as it previously thought, it seems. Though that’s not the kind of news that’s going to rock the stock, it does give us a window into the way Tesla Motors handles targets, and talking to shareholders.
Tesla Motors slows down Superchargers
Tesla Motors updated its Supercharger map this week and it now shows plans to have fewer chargers up and running by the end of the year. Reddit user atreydes noticed the change, but said that the map for 2016 appears to be unchanged. The slow-down in progress in the network could be due to almost anything and is likely due to local factors at each new station.
Given the problems that Tesla Motors Inc has had with the Model X delay, however, the slow-down in the Supercharger build out may be seen in light of the firm’s communications problems. Tesla CEO Elon Musk makes spectacular promises about future progress. Though he usually comes through on those promises, he rarely does so on time.
The firm’s Supercharger network hasn’t exactly hit a brick wall, and this issue will likely go unnoticed by most of those following the firm. Just because everybody else is ignoring it doesn’t make it is meaningless, however. The Supercharger change speaks to the way Tesla Motors handles its projects, and studying that process is more and more pressing as we head toward the blossoming of the firm’s plans in the launch of the Model 3 next year.
Model X breaks Tesla Motors promises
The Model X has been promised and delayed so many times at this stage that it’s difficult to catalog the history of the EV SUV. Elon Musk showed off the SUV in grand style at an event on September 29, and expectations were high that shipments would soon begin. The car still hasn’t made it out of the factory, or at least not in numbers that are considered high enough, and the price of the firm’s stock has dropped as a result.
A week before that car came onto the stage Tesla Motors stock was trading for more than $260. On this afternoon’s market a single share in the California automaker was selling for $234.24.
Right now there’s still been no real talk of a timeline on deliveries for the Signature Model X. Those who are first in line for the car still haven’t been contacted for delivery, and at this stage it’s very unlikely that Tesla Motors will be able to get more than a couple of hundred units of the Model X to buyers before the end of the year.
That delay is perfectly understandable given the size and shape of Tesla Motors. It’s a very small car maker, and it’s building very unusual cars. Delays can be caused by a slow down in the shipment of a single part. What has been more difficult to deal with, for those with cash behind the firm at least, is the lack of concrete information on its progress.
With the Supercharger network there’s a similar problem. It’s not the marginally slower roll out that can affect investors, it’s the fact that, once again, Tesla Motors has not lived up to its promises, even if those promises were only on an interactive map on its site. Lucky for Elon Musk, his firm is way ahead in the EV race, so a few speedbumps aren’t a problem right now. The Supercharger network may not be as immune to issues as some think, however.
Tesla Motors is still the only game in town
The quick roll out of the Tesla Motors Supercharger network in recent years has been incredibly impressive. The quick take up in stations along the most traveled routes in the US makes a Tesla Model 3, the mass market car that’s set to hit the road in 2017, a much more attractive prospect than the likes of the Nissan Leaf. That may not be all good news for the firm, however.
If Tesla Motors Inc was able to build out infrastructure that fast, with all of the limits it experiences as a much smaller firm, then it’s clear that a company like Volkswagen AG could do the same. BMW and Volkswagen announced at the start of 2015 that they’re working on bringing a universal charging network to the US.
Just last week it was reported that Audi, a subsidiary of Volkswagen AG, was looking for partners to help it build a massive charging network. The problem is, of course, that Audi doesn’t make an EV right now, and it’s going to be a long time before it’s a significant business at the firm. There is, however a lot in the way of those companies that Tesla doesn’t have to deal with.
At a base level, neither BMW nor Volkswagen has really committed to the idea of an EV. Both only offer a couple of models in the category, and neither of them has the range to compete with the Tesla Motors Model S. If the pair decided to build out a Supercharger network it’s likely they could do so just as fast as Tesla, but they don’t seem hell bent on getting it together.
Despite the slow downs, Tesla Motors is still the only game in town when it comes to fast charging. That’s at least a couple of years of an advantage over rivals, and it’s only going to get more and more important as we head toward the release of the Model 3.
In those years, however, Tesla Motors may have to learn to be more clear and transparent with those who are funding its projects. It’s likely that Tesla will have to come cap in hand to investors for more money some time in the next couple of years. Up until now they’ve been more than willing to fund his spending habit, but it’s a fragile situation.
A lack of funding, or greater cost to funding, could have a very adverse effect on Tesla Motors stock. If the firm seems prone to constant issues, and regular missing of targets, Wall Street may pull the purse strings a little bit tighter, and leave Tesla gasping for funds to cover its massive capital spend. That’s one of the biggest risks facing the firm in the months and years ahead, and one that every trader should weigh when looking at the firm’s shares.