Has Tesla Motors Inc Sunk Itself With the Model X? – ValueWalk Premium
Tesla stock

Has Tesla Motors Inc Sunk Itself With the Model X?

Has Tesla Sunk Itself With the Model X? It may be fatally fascinating. Excerpted from an email Whitney Tilson sent to investors

Interesting article (below):

Tesla just needs a crossover to flesh out its showroom, preferably one with a sub-six-figure price. Instead, the hysterically complicated Model X may prove to be the noose from which Tesla swings. The car is at least two years overdue and far more complicated than it needs to be. The giant curved windshield, the sensor-studded self-opening front doors, those “falcon wings,” which rise at the speed of two arthritic old stage hands hauling up a Broadway curtain—they’re all fascinating but unnecessary. The X would be a challenge for Toyota to build profitably, much less Tesla.

There’s a feeling in Silicon Valley that the only problem with the auto industry is that the likes of Apple or Google hasn’t yet hosed it with its genius. Eager young minds, certain of their infallibility. Musk said he didn’t want to be another automaker that unveils beautiful show cars but sells dull conventionality. He’s about to find out why concept cars stay concepts. The doors were among the X’s novel systems that proved fussy at the Fremont launch party. I boldly predict that the X will be a warranty nightmare when it should have been a simple platform variant to rake in more cash.

Long-established car companies get to screw up. VW will survive Dieselgate, as Toyota survived Accelerationgate and GM survived Ignitionswitchgate. But Tesla does not have the profits—indeed, any lasting profits—to weather a dud. Which is perhaps why, as I write this, investors are skeptical about the stock when, if anything, they should be rhapsodic over the new model and Tesla’s fledgling battery business.


I’m willing to bet that it’s an incredible car, however, and that I’d fall deeply in love with it if I got one (especially being the gadget hound that I am).


Which brings me to my current dilemma…


A couple of years ago, I put down a (fully refundable) $5,000 deposit on a Model X and was told that I was #10,128 in line.


On 12/21, I got this email from Tesla:


Dear Whitney,

Today is an exciting step towards building your Model X. We’re thrilled to invite you to configure your car for production.

Model X combines the utility of an SUV with Tesla’s standard of safety, all-wheel drive functionality and signature performance. With its distinctive falcon wing doors and seat configuration for up to seven people, Model X is designed to be even more practical than a typical SUV in every way. Click below to get started:

Configure Now

Estimated delivery timing will depend on your configuration options and where you plan to take delivery. The Tesla Delivery Team will reach out to you in the coming months when it’s time to prepare for delivery.

In the meantime, if you have any questions, please call or email at650.681.5100 / buildmyx@teslamotors.com.


The Tesla Team

It seems a little premature to ask me to plunk down ~$100,000 (for the model I spec’d out) without even having the opportunity to test-drive this new car, so I emailedbuildmyx@teslamotors.com and asked when a car would be available to test drive in Tesla’s NYC showroom – and got a vague answer (meaning they have no idea). I also want to see what Consumer Reports has to say…


OK, but let’s say I love it and Consumer Reports (and others) give it rave reviews. Should I buy it?


The way I’m feeling right now (in light of the beating my fund is taking in the markets!), I’m not feeling flush enough to drop $100,000 on something I don’t really need, especially when my current Volvo SUV, while a tired old gas-guzzler, is getting the job done just fine and certainly has a few years left in it.


So here’s a totally random idea/Hail Mary pass: let’s get 3-4 folks (NYC based of course) to split the cost of the car and share it. Heck, write it off as stock research! If you’re interested, let me know…


Has Tesla Sunk Itself With the Model X?

It may be fatally fascinating.

It had been a few years since I last visited Tesla Motors, that enormous white sheet cake of a factory down at the muddy bottom end of the San Francisco Bay. The Fremont plant used to spit out half a million vehicles a year when it was a GM-Toyota joint venture, when it was a humming hive of American manufacturing vitality. Then it turned into an empty husk, and then Tesla acquired the deed in 2010 for a relative pittance. When I went to see the first Model S in 2012, there were a couple dozen cars in the employee lot. Tumbleweeds would not have looked out of place. Inside, a few robots practiced their tai chi moves with empty pincers, as there were as yet no panels to shuffle. And if you looked beyond the freshly painted and well-lit assembly area, the view faded off into the shadowy darkness of the plant’s deeper reaches. This past October, I exited Interstate 880 in Fremont for the debut of the new Model X crossover. Now, cars fill all the spaces, line the curbs, and spill into overflow lots. Trucks trundle in with deliveries, and minibuses shuttle people around. This dead factory is alive again.

Full article here

Has Tesla Motors Inc Sunk Itself With the Model X?

Source: Pixabay


Comments (23)

  • Chris Lau

    …you just HAVE to have the car though. those doors, that power. /s

    January 9, 2016 at 7:51 pm
  • DeeAgeaux

    Isn’t VW tired of posting and reposting nonsense?

    Tesla has 30k preorders.

    The CUV starts at $80k. Yes, those that order the higher end models get priority but if you want the base model you can order it and get it delivered in 6 months or so.

    When people have but a deposit and waited 3 years for your product and are willing to wait up to 6 months more that is not a product that sinks your company.

    January 10, 2016 at 1:35 am

    Any SUV that will accelerate with a Ferrari, Lambo or Corvette, run silent electrically, have the coolest doors and upgrade itself online, all the while carrying 7 adults AND their golf bags… you’re willing to call a NOOSE ??? Stop huffing that glue…

    January 10, 2016 at 1:46 am
  • My2Cents2013

    Whitney appears to be clueless. She states ” A couple of years ago, I put down a (fully refundable) $5,000 deposit on a Model X ” and now she’s questioning if she should spend $100K on the X and “I don’t really need, especially when my current Volvo SUV, while a tired old gas-guzzler, is getting the job done just fine and certainly has a few years left in it.” Here’s why I’m left thinking she’s clueless. The Model X, from the beginning was said to be about $5K more than the Model S. It’s like she’s surprised about the price and thinks she should keep her old Volvo. Maybe she should have invested the $5K and saved herself from this dilemma. Maybe she should have invested that $5K in TSLA a few years about – she’s have nearly doubled her investment. Glad she’s not my financial advisor.

    January 10, 2016 at 9:46 am
  • george s

    You guys are missing the point, its a neat concept but being able to make money on it is another story. Tesla’s business model doesnt work without goverment subsidies, so even if you dont own one you and I are paying for Eltons folly, sooner or later he will run out of other peoples money…at his present burn rate of over 500 million a quarter it will be soon.

    January 10, 2016 at 11:54 am
    • TheSA-X

      Tesla doesn’t get the tax subsidy, that goes to the buyer

      January 10, 2016 at 5:14 pm
  • token420

    What I would really love at this time from Tesla Motors is a simple $30,000 car with nothing on the dashboard but a speedometer, odometer, clock, remaining charge, and a dock for my iPhone. A free Model X would also be acceptable.

    January 10, 2016 at 1:04 pm
    • TheSA-X

      the center touch screen actually provides huge value for the driver. they control everything about the car through it, and Tesla can provide software updates to it over night

      January 10, 2016 at 5:15 pm
      • token420

        I can appreciate that some people would want update capability and auto-pilot. My preference as a consumer would be a simpler more affordable vehicle without those features. Once I buy the car I’d prefer the manufacturer no longer controlling it.

        January 10, 2016 at 5:23 pm
        • geoffrey bailey

          Then buy a used GM that hasn’t had the ignition switch replaced if that is what you want.

          January 11, 2016 at 8:44 am
      • Lance Cars

        All that stuff cost big money.

        January 12, 2016 at 1:22 am
  • Denis

    I feel like you are the type of person that jumped in without realizing the actual cost of the car and is trying to find an excuse to get out of buying it. If you already have a car and it works great why would you ever even consider ever putting a deposit of 5,000 towards one that didn’t have a release date and let alone much details on the finish product?

    January 10, 2016 at 1:18 pm
  • Leo

    Tesla is not making any money? I thought everybody knew for a hundred times repeated fact that Tesla has the highest margin among all automakers. Somewhere above 25% or even 27%? That means for every car sold for around $100,000 Tesla makes more than $25,000 after the cost to make this car is been substracted.
    That is called “PROFIT”! And after that there is nothing wrong that revolutionary game changer start up auto company is spending all that PROFIT(!) plus whatever more to speed up that same revolution that we all so much need to maybe have a chance to save this planet.

    January 10, 2016 at 1:27 pm
    • Dhoklastellar Fafda®™

      Interesting, do you have a source on those figures? Traditionally margins are said to be below 10%. If its 27% that’s quite an amazing figure.

      January 10, 2016 at 1:30 pm
      • Leo

        That’s Wright. Traditionally it is around 10%. But Tesla is not a traditional company. Any Letter to shareholders at a quarterly earnings report meeting would show that 25% margin guideline number is getting beaten. One can argue that it is only possible now because the car is selling at a high premium to first adopters in the luxury
        market sector. But it looks like Tesla is
        commited to sustain it in the future

        January 10, 2016 at 1:40 pm
      • geoffrey bailey

        Go look at the Tesla quarterly reports – it’s there. Tesla is currently losing money because of the tremendous amount of money they have been pouring into R&D and buildup of their assembly lines. Tesla has said their R&D expenses will go down this year.

        January 11, 2016 at 8:43 am
    • MG

      Your basing the margin on non GAAP numbers. Since GAAP does not just allow you to remove expenses the margin number is a joke. In order for that number to mean something according to Elon Musk himself Tesla needs to sell about 500,000 cars per year. About 10x more than they sold this year!!! It’s completely dependant on more than half of the volume coming from the Model 3 – a car that has even been seen yet, That’s not profit, it’s voodoo accounting

      January 10, 2016 at 10:15 pm
      • Leo

        It’s not just a “voodoo accounting”. Tesla is constantly ramping up its production. Last year they made and sold 50,000 plus cars and this year they will pass a 100,000 annualized rate of production. If they would choose to just contain themselves in that luxury market niche then that voodoo non GAAP number would easily become a GAAP number since
        it didn’t cost them much to steal their first Palo Alto factory from GM.
        But if they invest heavily to leap frog
        to 500,000 cars like you said and way beyond, building the new worlds electric mobility infrastructure, doubling the worlds battery production by 2017 in their first gigafactory with new heavy R&D expenses to keep building ever cheaper and longer lasting batteries to store the energy with the goal of transitioning the whole world to sustainable energy away from fossil fuels – then those GAAP numbers will surely be screwed. Temporarily…
        Just give it some time.

        January 11, 2016 at 10:04 am
        • MG

          You still don’t get to ignore actual expenses while planning for projected growth – whether realistic or unrelastic. Major risk in never being able to attain those lofty projections in a reasonable timeframe (or ever). Also those numbers don’t take into account the huge amount of debt. Over $900 million maturing in 2019 and another $1.4 billion maturing in 2021. The company will have to raise more capital by issuing more shares and diluting current shareholders. In this environment Non GAAP gross margins is just a fiction to keep the cult slurping the Kool Aid

          January 11, 2016 at 1:32 pm
  • Jeo Ten

    Hysterically complicated? Provide the evidence for that.

    January 10, 2016 at 2:52 pm
  • Stephen Hodson

    Written by…VW Staff. I love the transparency!! Thank you VW Staff for confirming your position on your competitor, Tesla.

    And no, I don’t have any sources for that.

    January 10, 2016 at 6:25 pm
  • Gabriel Seneca

    X DUD: There is a reason why mass produced automobiles have never featured door openings in the roof.

    You Can’t Fool Mother Nature!

    The Falcon doors might have gone well with a Tesla sports car, where a few discomforts can be tolerated, but not so in a family SUV. A large segment of Tesla owners live in the Pacific Northwest, where rain occasionally does come down sideways.

    Model X design is illogical. The front doors can never compliment the Falcon doors. Rain, sleet, snow, and wind will tell…

    January 10, 2016 at 8:24 pm
  • geoffrey bailey

    It’s a good thing the Model X comes with a HEPA air filter, just in case it gets behind one of those VWs or Audis that failed its emissions tests.

    January 11, 2016 at 8:49 am


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