Model X: The Trump Card for Tesla
Tesla Motors (NASDAQ:TSLA) has set the stage for the world wide debut of its newest Model X by the end of the third quarter this year, and the expectations are mounting by the hour. The company has invested billions in its first crossover, and Tesla’s cash flow has slipped into the negatives, making the success of the Model X vital for the company. But the premium electric car maker is leaving no stone unturned to make its latest innovation a runaway success.
Sneaking a Peek
A closer look reveals that the company is taking its promises very seriously. With Dual Motor All Wheel Drive and the center of gravity of a sports car, this crossover vehicle vows to tote its passengers over hill and dale. Its uncompromised three row sitting arrangement comfortably makes room for at least seven adults, and the styling and functionality of its all-new Falcon Wing Doors give it a niche edge. Tesla reveals that the Model X is engineered to go from 0 to 60 in less than five seconds, while it’s captivating Falcon Wing Doors allow its passengers to conveniently get into that third row of seating solving one of the major problems faced by large SUVs. It has replaced the buttons on the dashboard with a cool touch screen and has made the standard model available with a 60 kWh battery, while the Performance package comes with an 85 kWh battery. CEO Elon Musk is more than confident that Tesla’s new SUV will do better than its celebrated Model S sedan, and considering the upgrades to the new vehicle, it is a claim to vouch for.
To begin, the Model X version is going to be around 10% heavier than its Model S cousin and will travel 300 miles on a single charge, which is around 30 miles more than that of Model S. The crossover is slightly larger than its previous model and is significantly higher. While the Model S is 56.5 inches, the Model X will be around 64 inches. It has priced its new model judiciously and is expected to come with a price tag of around $70,000 at the initial levels, making it the more expensive option.
But Tesla, too, is waiting with bated breath
The Model X comes in at a time when the electric car company is facing a serious cash crunch. Tesla’s cash flow has dropped to a negative $131.8 million for the first quarter this year, down from positive $60.6 million in the same quarter last year. Adding to the list of concerns is its first quarter results, which revealed that the company has suffered a net loss of $154.2 million, compared with a net loss of $49.8 million in a year long period, leaving it little room for mistakes with the new model. The California car maker needs to create a splash in the market with its next offering in order to meet its target of delivering 55,000 vehicles by the end of 2015 more.
Is all this getting the best of Tesla?
Of course it isn’t. With a 55% increase in sales from the year before, this electric car manufacturer’s confidence is more radiant than ever before. Tesla has delivered 10,045 Model S sedans in the first quarter and expects to ship another 10,000 to 11,000 vehicles by the second. Its revenue is growing strong on track, and to top it all is the swelling demand of its Model X crossover even before it has hit the market. Tesla has reported that reservations for the new Model X have already surpassed 20,000.
Tesla has upped the ante with this one dedicating most of its $426 million capital expenditure in the past quarter towards preparing the Fremont factory for its Model X production line. This year, it pledged $1.5 billion in capital expenditure, most of which was burnt in buying production tools for the Model X.
Tesla is aiming to solve the most common problem faced by electric cars: the problem of charging the vehicles while on long distance travel. It is setting up the world’s fastest charging stations called Super Chargers in strategic locations to minimize stops during long drives. These will charge the cars in minutes, helping them to get back on the road quickly. It already has a network of 78 Super Chargers that covers over 80% of the U.S. and Canada, and is working toward opening 30 new stores and service centers in Europe. It has also stretched its footprints into Asia by setting up its showroom in Beijing, China.
Tesla believes in delivering its cars directly to its buyers; thus, it has come up with a unique method of improving the touch and feel experience of its cars for its customers. It has developed pop-up mobile stores that will be touring popular locations this summer, giving its buyers a full-fledged store experience. They are made up of two shipping containers fitted on a flatbed truck that unfolds to double its size in a few hours to display the models.
Tesla ensures that its efforts will successfully bring more customers under its fold and put an end to its financial difficulties before the year ends.
Conclusion
The Model X is an extremely important vehicle for Tesla, and the prolonged anticipation for the release has ensured that there will be a certain amount of buzz when the vehicle finally arrives in car showrooms. What is easily understood is that Tesla is in no mood to play it safe, as it is confident enough to pull off the risk and give its shareholders higher gains.Ă‚
