Was the Model X delay REALLY about....the Model X?

Was the Model X delay REALLY about....the Model X?

Was thinking about the delays in the SC network (in the US) and how Tesla would not come close to the 205-215 they projected in 2014 (total open in U.S.). However, I was also noticing that there seems to be a real acceleration of SC permits and construction in the last couple of weeks. That got me to wondering if Tesla was trying to get a lot more SC stations open before the deliveries of the Model X begin. Tesla will quickly double or even triple the number of its cars on the road over the next year. The last thing I think they would want is to have any negative reviews or feelings about range or availability of SCs. So, with that in mind, I wonder if it is possible that the delay for the Model X was more about allowing the SC network to fill in some and less about the Model X itself?

JeffreyR | 17 november 2014

I like the creative thinking on this post, but the schedule has slipped multiple times. And, if SC Sites or Service Sites were an issue then the Model S owners would have complained (more). I think you're right in that they are in a big push, but I think it's more about refocusing and cash flow than anything else.

The posts about SC business model are interesting in that you could argue they pay for themselves especially when you say they are more like billboards (advertising) than mere infrastructure.

The ebb and flow of SC roll outs is seemingly random considering how often permits exist long before construction begins in some places and construction "finishes" but they are not turned "on" in others. I am stuck on "Texas island" w/ no way off except thru Oklahoma until the very end of 2015 (if the "future" map is to be believed). They said in the Tesla Store that Texas is the 2nd biggest market in the U.S.

Tesla seems to have a rough schedule for SC roll outs, but they are beholden to permits, grid hookups, and cash flow. So they cannot simply do whatever they want. But by this point I would hope they have figured out a few tricks although I am sure every county/locale has its quirks. Remember Tesla is also working on partnerships for charging and sponsoring on site hookups at hotels and other destination sites.

Other reasons for delays:

- Elon had a bright idea about some cool feature that requires some re-working or supply chain issues
- Shifting production at the plant is more disruptive than they originally thought/announced.
- They want to make sure they can go through the ramp up quickly, so need to buy and configure more robots, and that is taking longer than it should.
- The mirrorless option is coming but, the laws won't change until end of 2015.
- Panasonic had supply issues for batteries.
- Falcon-wing doors are harder to do right than they thought.
- New batteries are coming so they want to have new packs align w/ announcement and release of Model X (this is my favorite one). They don't want a big change right after the release.
- General glitches and trying to get things right so the release is clean (most likely reason).

Not Good Reasons
- Gigafactory is taking focus and resources
- Cannot hire enough people to work the line
- Not enough $$$ to invest in expansion

Kingsthrone | 17 november 2014

At first I believe that it was delayed due to engineering issues. Now I think a bigger battery lies behind the delay of the Model X.

Timo | 17 november 2014

They managed to create antigravity device by streaming higgs bosons to negative energy field caused by casimir-effect and want everyone to get their flying car?

:-P In case that wasn't obvious.

Red Sage ca us | 17 november 2014

The regulations involved with attempting to 'sell' electricity are far more involved than would be worthwhile attempting to bill Customers for...

Even at $0.20 per kWh, that would come to $8.50 per half tank fillup. Cheaper than gas? Maybe. Worth collecting? Not really.



carlk | 17 november 2014

I seriously doubt that is the reason. After all Tesla is already selling MS which shares any issues that MX might have.

My guess of the delay is there are major redesigns, FWD and/or others, that require more time to test out. My wildest guess is the final version may not look like what we have seen before.

DTsea | 17 november 2014

Shensierra, tesla has stated that the costs of managing microcharges for power are too onerous. In effect you pay once in advance. This helps tesla's cash flow and encourages use of the car for trips, which helps to dispel 'EVs are impractical' myth.

Näky | 17 november 2014

Tesla just don't need to bring Model X to market(yet). Even with Model S Tesla is production constricted. With new model income keeps same but production, service and management costs rise. Longer they can keep Model X reservation holders calm, better for their income. I'd like to have my X delivered as soon as possible, thought.
I hope that while they stall introduction of model X, it's honed to perfection.

buddyroe | 17 november 2014

I personally hope they nix the funky gull wing doors. There's a reason no car with funky doors (suicide, opening upward, gull-wing, etc) has ever been a hit with the mass market - they simply aren't as good over-all as the old fashion, plain doors that we have come to expect on cars.

DallasTeslan | 17 november 2014

@Shensierra there would be a lot of extremely unhappy Tesla owners (myself included) if they started charging for SC use. Surely it is factored into the price of the vehicle somehow. And it's one of the best things about the Tesla IMO. Not only do you get to avoid gas stations but there is no car swipe, no transaction period.

Now if they could just fix the "Texas Island" thing JeffreyR referred to.

Solarwind | 17 november 2014

Agree the SC's being free is a huge + for Tesla and about the only reason I decided to invest in a Tesla. It is a huge investment for me and the SC-s add value.

petero | 17 november 2014

Adam Jonas of Morgan Stanley, on 11/17, suggested it may be the dragon wing, rear doors that have pushed back the launch. That and making sure they have the production line and quality in place.

TM probably has more to lose by rushing the MX than by delaying. Besides, the “MS D” may provide valuable road testing.

EternalChampion | 17 november 2014

Adam Jonas, of Morgan Stanley, may have just as easily suggested that the flux capacitor technology isn't quite ready yet, but will definitely be by Fall 2015. Maybe.

If Morgan Stanley is employing an analyst that can only speak in platitudes regarding Tesla, they should ICE him.

drax7 | 18 november 2014

Building the machines that build the car are always time consuming, that is a big factor too.

CT-Greg | 18 november 2014

"I personally hope they nix the funky gull wing doors. There's a reason no car with funky doors (suicide, opening upward, gull-wing, etc) has ever been a hit with the mass market - they simply aren't as good over-all as the old fashion, plain doors that we have come to expect on cars."

I wonder if you'd like to expand on that assertion. I think the falcon wings make a great deal of sense. Note that they work differently than what other manufacturers have offered in the past.

CT-Greg | 18 november 2014

"@Shensierra there would be a lot of extremely unhappy Tesla owners (myself included) if they started charging for SC use. Surely it is factored into the price of the vehicle somehow."

It's a $2000 option for the 60. I'd assume SC access for the 85s is amortized the same way, just not optionally.

Red Sage ca us | 18 november 2014

Fly on the Wings of a Falcon...

I remember...

When the Buick Roadmaster Estate had ths awesome tailgate, that could either fold down or swing out, hinged on the left side...

When the Chevrolet Suburban had this weird, three panel door option at the back...

When Doc Brown made a time machine out of a DeLorean...

Nothing can stop the winds (wings?) of progress!



buddyroe | 18 november 2014

@CT-Greg - I'm not sure what else I can really say about it other than what I said. Other than high end sports cars, you just don't see these doors on any car. Tell me this, what is so different about the doors on the X and the doors on the Delorean?

And, what re-enforces my opinion on this even more is that the Morgan Stanley analyst has pretty much been right every time he has stated that Tesla will be late and why. Just a month ago, he said it looked like the X would be delayed until the 3rd quarter. Sure enough, it was delayed until the 3rd quarter. Now he is saying it is because of the doors. I believe him.

When you are a company with 1 car on the market, having a set of doors delay you a year is not a good thing - unless they can't get the batteries anyway. Then, it doesn't really matter.

Grinnin'.VA | 18 november 2014

@ DallasTeslan | November 17, 2014

@Shensierra there would be a lot of extremely unhappy Tesla owners (myself included) if they started charging for SC use.

I think the prevailing consensus among economists is "There is no such thing as a free lunch". One way or another, someone has to pay for SCs and the electricity they use.

Also, pay-as-you-go SC service wouldn't need to involve any credit card swipes at SCs. Preapproved transactions billed monthly would work just fine. Of course, Tesla has said emphatically and repetitively that they will never charge a fee for charging at SCs.

Now if they could just fix the "Texas Island" thing JeffreyR referred to.

Sorry for the barrier between Texas and the rest of the U.S. Do you think, maybe, that Tesla is going slow with SCs there because the Texas government continues its anti-Tesla restrictions?

Go Tesla!

CT-Greg | 18 november 2014

buddyroe: You wrote that vertical opening doors weren't as good as side-hinged, but gave no indication of the metric for that judgement.

Scroll about 1/3 of the way down the Model X product page to where the doors are shown, and pay close attention while doing the little drag demo. What you'll see is very different from historic gull-wing designs.

buddyroe | 18 november 2014

@CT-Greg My metric for that judgement is two-fold. First, no car that has had "other than side hinged" doors has ever been commercially successful as a mass market car (well, maybe a mini-van if you consider sliding that different). And secondly, I have heard a TON of issues raised concerning these type of doors. I want repeat them because I am sure you have heard them too plus I am hopeful that Tesla is able to alleviate all of these issues with their design.

I guess the final point I'll make about the doors is this. Do they really have THAT much of an advantage over normal doors? I hear them saying they do, but I really don't think they'd make much difference to me (not saying they wouldn't for other people). Just don't think they're going to be that much of a game-changer to warrant a 12-18 month delay for the car.

3seeker | 18 november 2014

Along with fine tuning falcon/dragon wing doors and assembly line prep work, I'm guessing that TM is also working on a new design language that would carry over to the production Model X and subsequent models.

My gut tells me to prepare to be blown away by the Model X once the production version is revealed. Getting impatient but excited at the same time.

grega | 18 november 2014

For "Futuristic" doors to be really successful they need to be effective, as if they've already gone through 20 years of revisions and improvements to find something that everyone likes and works well. That's hard to do in 2 years or less! Of course, if doors are the way they are today because nobody has ever tried to make them better, then that's an easier challenge. But I think it's a problem getting them right.

I doubt the delay is due to the supercharger rollout. I do think they would do well finding a way to charge for them though, and I think in the Model ≡ they'll need to find an option for that rather than add $5k to the purchase price. Of course any Model S85 can still have free access.

Selling electricity is a pain (in the US), but Solar City might have a license there(?). Alternatively, you could charge multiple "10 minute parking" spots, with free charging. This would encourage people not to hang around when they're 75% full unless they need it, and stop ICE cars parking in the spots. It could even offer some extra parking time "free" if no other cars are waiting. :)

Brian H | 18 november 2014

Extend your arms and swing them as far to the side as you can, and then bend your elbows keeping the hands back. Gull wing.
Now, extend arms forward, and then pull elbows straight back, THEN swing hands out. Falcon wing.

It's all in the timing (and joints).

Red Sage ca us | 19 november 2014

Brian H: +1 UP!

The Falcon Wing Doors will be fully intact. Elon Musk gave a mandate that Tesla Motors will never display 'concept cars'. They won't create fictional vehicles to entice the minds of potential buyers. He doesn't want Tesla Motors associated with fanciful designs of what 'could be' at some indefinite point in the future. They will only show absolute, workable, engineered examples in prototype form of what definitely will be part of their product line. Period.

Some have indicated that the Model X is somehow unnecessary to the success of Tesla Motors. They haven't been paying attention to Elon Musk at all. He said that it is imperative that Tesla be seen as a full line producer of cars. He would actually prefer to introduce a new car every year.

Without growing in manufacturing capacity, engineering competency, and design ability to support multiple vehicles at once, Tesla will always be seen as a small niche, boutique player that only makes toys for the rich. The Model X is the first step toward banishing that criticism. That will continue with the Model ≡ in 2017.

Supercharger access will become an included feature on all Tesla Motors products going forward. $2,000 represents only 2.5% of the total cost of a $79,900 vehicle. These are cars that command better than 25% margin. So effectively the Supercharger access represents less than 10% of the profit margin on each vehicle sold.

As the Model S becomes more popular the Supercharger network expands more quickly. Model X will likely attain a 3:1 sales ratio to Model S. So there would be more Supercharger capable vehicles on hand. Yet the amount of funds available for Superchargers would increase at the same rate.

With an increased user base for Model ≡, expected to sell at a 10:1 ratio compared to Model S, even if the same percentage of profit margin is set aside, you will still be able to continue the expansion of the Supercharger network. So if the base car has a lower margin, around 15% that would mean 1.5% of the profit could be put toward Supercharger expansion, upkeep, and energizing costs.

2015 -- $79,900 Model S with a 25% margin of $19,975. 10% of that margin comes to $1,997.50 which for the sake of argument we'll round up to an even $2,000 instead. Multiply that by 50,000 to get $100,000,000 per year to work on the Supercharger network.

2017 -- $84,900 Model X with a 25% margin of $21,225. 10% of that margin comes to $2,122.50 per car. Multiply that by 150,000 to get $318,375,000 per year to expand the Supercharger network.

2020 -- $34,900 Model ≡ with a 15% margin of $5,235. 10% of that margin comes to $523.50 which for the sake of argument we'll round up to $525. Multiply that by 500,000 to get $262,500,000 for Superchargers.

Tesla Motors could potentially have something like $680,875,000 per year available for Superchargers by 2020. At $150,000 each that would come to over 4,500 locations. At $500,000 each that comes to over $1,300 locations. At $2,000,000 each that comes to 340 locations.

So why charge per fillup, when the Supercharger network is already paid for by your sales of the cars?



JeffreyR | 19 november 2014

+1 RS
Other saving opportunities

- High-capacity wall charges at destinations for much cheaper (say $5K-10K).
- no advertising budget for billboards.
- no R&D for solar and battery field tests
- use recycled batteries for storage and smoothing out demand at SC sites

JeffreyR | 19 november 2014

Almost forgot... No dealers! Means better revenue, no lighting and storing car lots, no interest on that inventory. I'm sure that list can grow quite a bit too.

data02 | 19 november 2014

Letter from TESLA MOTORS to Tesla Model X reservation holders :

Brian H | 19 november 2014

Here's the new test drive video:
Note the rear headroom comment, 0:25-0:34.

annekristip | 20 november 2014

@Red Sage You forgot to calculate the running costs of SC-s. If you calculate ca 2000 USD earned per vehicle, looking how much others charge for charging, lets say 5 USD is a good deal for 50 kW, then each vehicle serves 400 times charging at SC. Lets say the car has 10 years lifecycle, 40 per year, means less than once per week. There are people who use it more, people who use it less, any crashed written off cars etc. I would say kind of break even, but a great possibility to earn in future if SC technology will last past 10 years. Bigger batteries will ease the situation as with higher range less need to charge outside home/work. The good strategy is to build them where people need it to travel, not for everyday driving in cities.

Red Sage ca us | 20 november 2014

annekristip: Nah, I didn't forget... It's just not shown here. That was the tack I took in previous discusions. My hope was those who remember those prior posts would see the correlation. My apologies if it seemed otherwise, but I'm not posting from my home PC, which has my archived posts. Hmm... Maybe it's time to start making full use of SkyDrive and Google Drive...?

On the final point, though... The initial rollout of the Supercharger network is to relieve two criticisms of electric cars: 1) You can't take road trips; and 2) It takes too long to charge. Sorted.

Unfortunately, people make the mistake of not actually listening to all that Elon Musk says, or they simply dismiss it as marketing hype, or they presume he is naive and will eventually renege on promises such as ' for the life of the car ... use it as much as you like...' when it comes to Superchargers.

Nope. He means every single word. He's already worked out thst even if 3,000 Superchargers with four stalls each were occupied twenty-four hours a day for a full year... Tesla Motors' profits from sales of cars would cover the cost easily. So there's no need to charge Customers weekly, monthly, or yearly rates for access.

Thus, once the long distance concerns are settled, urban charging infrastructure can be built out as well. We are already seeing efforts in that direction. There are HPWCs being made available in private and public spaces. There are urban Superchargers being set up in cities where the majority of citizens do not have access to enclosed personal garages. All this is in preparation for Model ≡.

The Tesla experience is not meant to be exclusive, but inclusive. Not rare, but ubiquitous. The Superchargers do not belong solely to Model S and Model X buyers.

Brian H | 20 november 2014

Beat me to it. If the SC build-out AND power cost are written off as marketing expense, they'd still be cheap at twice the price. And essential.

centralvalley | 22 november 2014

Not to mention that the overhead involved with charging $.35/kWh for electricity would cost more than than any profit generated, and some jurisdictions have restrictions on selling electricity if the provider is not a public utility.