Tesla Motors is a company that punches well above its weight in terms of media attention, and this is also very much true of its Model X vehicle. The Tesla Model X CUV would gain dual-qualification as one of the most anticipated vehicles in the history of the motor industry, as well as one of the most frequently delayed. The prototype for the Model X was unveiled at Tesla’s design studios in Los Angeles on February 9, 2012, and the company is only now promising to deliver the first completed vehicles of the Model in the third quarter of 2015.
Model X critical to Tesla future
The delay in this vehicle perhaps indicates the extent to which it is important to the future of Tesla. The electric car manufacturer has made a massive splash in its relatively short history, and ensured that the CEO and founder, Elon Musk, is an extremely rich man. But the company knows that it faces massive challenges in the near future, and in this respect the Model X is extremely important to Tesla.
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One of the most obvious issues that Tesla has had to address is the significant fall in its stock price over the last year or so. Tesla shares are down 20 percent in 2015:
…and the valuation of the company is obviously dependent on Tesla producing a killer vehicle at some point in the near future.
Even a company of the size and prominence of Apple has experienced scepticism in the stock market for this very reason in recent months, with the Apple share price tumbling significantly on the back of city scepticism about its sales figures. Apple has had to craft a strategy which demonstrated to the city that it can develop successful new product niches. Thus, Tesla equally needs the Model X to be a massive success, and this will dominate 2015 for the electric car manufacturer.
Another issue that Tesla faces in the near future is increasing competition in the electric car marketplace. Numerous traditional car manufacturers are already developing electric vehicles, and the aforementioned Apple is also rumored to be working on an electric car for release by the end of the decade. Although Tesla has proved that electric cars are now a viable concept, it must now equally demonstrate that it is the best company to manufacture them successfully.
Tesla Model X – Jonas confident
But some analysts are extremely positive about the long-term prospects of Tesla. Auto analyst Adam Jonas believes that the Model X will be an extremely important vehicle for Tesla, and one that will enable the company to get back on the straight and narrow. Jonas points out that Tesla’s Model X is the first car which has been manufactured by the company as a wealthy, well-endowed firm with a significant raft of suppliers wanting to do business with Tesla.
Considering the excellent early impression that the Model X has garnered with those that have witnessed it, Jonas believes that this vehicle will be a massive success for Tesla. He has stated that the remainder of 2015 will be very heavily focused on the Model X from Tesla’s perspective and that it has the potential to ultimately drive the stock price of the company as high as $280. Jonas states that the near-term proof-of-concept of the product is extremely sound, and that he firmly believes that the Model X will be a disruptor for what he describes as “the most disruptable industry on earth.”
There are other positive signs for Tesla too. Although Apple may very well turn out to be a direct competitor for Tesla in the foreseeable future, it is also possible that Apple intends to enter into a collaboration with the corporation. Many manufacturers believe that Apple’s talks with Tesla which took place recently were in fact focused on utilizing its software in Tesla vehicles. This would be a massive coup for the company if it is achieved, and would almost certainly have a massively positive effect on the Tesla share price.
Tesla Model X – Goldman Sachs bullish
Meanwhile, other credible sources are also positive about the future of Tesla. Goldman Sachs, the investment bank which was heavily linked with the Obama administration in its early years due to the multitude of former employees within its ranks, is certainly one such entity. Goldman Sachs Equity Research recently published a company update on Tesla which suggested that the current share price in fact represents a good buying opportunity for investors.
Goldman Sachs has stated that it believes that very few electric vehicles will be able to beat the cost / range comparison of the three primary Tesla vehicles, the Model S, Model X and Model 3. Analysts from the investment bank contend that the industry-leading battery costs that Tesla is able to rely on will ensure that its lead in the electric car marketplace lasts well beyond the end of the current decade.
Tesla Model X – not all analysts convinced
However, not all analysts are convinced that the long-term outlook for Tesla is positive. There is a general agreement that the current Tesla stock price of just under $190 represents an under-valuation, but CLSA Americas has recently slashed its price target for the corporation. And the Model X is apparently central to this decision.
According to analyst Andrew Fung, there are complexities in the design of the Model X which will ensure that initial profit margins are narrower than anticipated by many investors. Fung believes that this will seriously hurt Tesla earnings in the short-term, and limit upside potential in the stock.
What can be said for certain is that the Model X will be an extremely important vehicle release for Tesla. The weight of anticipation after a 40-month build-up to the release of the Model X ensures that there will be a certain amount of buzz when the vehicle finally arrives in car showrooms. Whether or not it will be the success that Tesla craves remains to be seen.