Tesla unveils Model X to mixed response

Palo Alto-based car maker Tesla Motors unveiled the Model X Thursday night.(Photo courtesy of Tesla Motors)

Last night was a big one in the world of cars, as Palo Alto-based Tesla Motors unveiled its Model X, an all-electric luxury crossover utility vehicle, at the Tesla L.A Design Studio in Hawthorne, Calif.

While the car’s premiere was certainly exciting, it also left analysts and car buffs questioning whether or not the carmaker truly delivered.

The Model X is built on a passenger car body, specifically Tesla’s Model S sedan, with the design of a sport utility vehicle. Its sleek exterior body, seven interior seats, and “falcon wing” doors, exude style, which is exactly what Tesla’s Chief Executive Officer Elon Musk intended.

“The Model X is more SUV than mini-van,” Musk said in an investor update call in January. “More functionality than a mini van, more cargo, easy to get in and out of – many people are forced to buy a mini van but hate it because they need functionality, so we want to give them functionality that looks really cool.”

Not everyone is sold on the uniqueness of the design, however. “From the point of view of design,” said Luca Gualco, the global director for Ferrari Financial Services, “Tesla did not really do something completely different.”

The car has already been compared to the Acura ZDX and BMW 5 Series Gran Turismo. The more expensive BMW X6, though, might be a more accurate comparison point, according to Hunter Hagenbuch, a sales associate for Truspeed Motor Cars.

“Once you add on all the features, you are looking at a car that is close to $80,000, which is about the same range as the BMW X6. If you are going to spend 80 grand on a car, the question is whether the Model X can deliver all the desired features? There is still a ways to go for electric cars to be as easy to use as gas, they aren’t really road trip cars, so that is already one issue.”

The SUV, minivan, sports car combination has also left some analysts unsure on who exactly is the car’s target market. “If you take away the cool factor, I am trying to understand who this car is aimed at,” said John Licata, an energy strategist and Tesla analyst at Blue Phoenix.

The “falcon wing” doors are evocative of the gull-wing doors made famous by the DeLorean DMC-12, but with a bi-fold arch so that the doors can open in tight spaces. But Licata questions whether the design is truly suited for the soccer-mom crowd, who would potentially be attracted to the car for its space, or whether Tesla is targeting a more “techie” audience.

He also notes that the doors may not be fitting for East Coast customers, where garage height clearance is not as high as in California. “Tesla can not just market to the West Coast, and it has been struggling with the East Coast demographic,” Licata said. “The company needs to educate East Coasters more about the benefits of switching to electric cars.”

Hagenbuch is more sold on the doors working for the soccer mom market. “It is for people who are active,” he said. “You can stand inside, so it is easy for say a soccer mom to get her kids in and out. They are very innovative.”

There are definitely perks to an electric crossover utility vehicle. Since it is all electric, the Model X does not have to accommodate a gas engine, meaning there is cargo space in both the front and back of the car. The battery is located in the bottom of the car, lowering its center of gravity, so it handles more like a sports car than an SUV. Musk said the car has a 0-60 mph acceleration time of 4.4 seconds, 0.2 seconds faster than the Porsche 911 Carrera.

Tesla’s stock responded positively in anticipation to the new model. The day of the release, stock rose 2.29 percent during trading hours, and another .61 percent after trading hours, according to Yahoo Finance. However, the company’s stock suffered today, dropping 4.54 percent to $31.10 from $32.08 daytime trading. The stock rose 0.19 percent to $31.16 in after hours trading.

“The company didn’t reveal the car’s range, so we can only make assumptions,” said analyst Licata. “This might have something to do with the drop in stock.”

Prior to release, Tesla unveiled two “ghost” images of the car, one that gave an outline of the sleek front profile, another than highlighted the wing doors, excitement over which may have influenced the stock’s rise in price during the day.

Knowing excited car buffs would be Photoshopping the images in an attempt to see more of the car, Tesla also hid a message in one image. When the whites are brought up to their maximum point, no more of the car is revealed, but the following message appears: “Patience is bitter, but its fruit is sweet.”

As for the Model X’s positioning in the car industry, Tesla may have hit the right niche, according to Antonio Danova, an industry analyst at IBISWorld.

“Electric vehicles are normally lacking in terms of performance,” Danova explained. “Tesla is at the forefront of marketing high-performance electric vehicles, so they have an opportunity to gain some market share.”

The hybrid-electric vehicle market is forecasted to grow, according to an IBISWorld report, at 6.3 percent annually until 2017. In 2011, electric vehicles accounted for 6.2 percent of this market.

“It is a small area that hasn’t exploded, but there is a lot of room for growth as electric vehicles grow in popularity,” Danova said.

Tesla analyst Licata just hopes the company can stay focused in order to maximize their growth potential. However, with Musk announcing the possibility that his other company, SpaceX, will go public next year, Licata worries Tesla might be spreading itself too thin.

The pressure on Tesla to perform is heightened by recent events in the company. Two of the lead engineers on the Model S left the company earlier this year, and analysts are watching to see if this will impact the rollout of both the Model X and Model S.

“Elon Musk was able to smooth over the leaving of the engineers,” said Licata, “but now he really needs all hands on deck, Tesla needs to stay extremely focused.”

The Model X is slated for production in late 2013. It is Tesla’s third car range, after the Model S sedan which will be released for sale later this year, and the Roadster.

While Tesla states they will price the Model X in the same range as the Model S, which begins at $50,000, there is speculation that the base model will be slightly more expensive. The Roadster starts at approximately $109,000.

+ posts

About The Author

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top