Tesla Motors Inc (TSLA) Model X To Be Priced Close To Model S

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Elon Musk, product architect and chief executive officer of Tesla Motors Inc (NASDAQ:TSLA) said the new models being developed by the electric car manufacturer should be cheaper than its current Model S sports sedan, and the upcoming Model X sports utility vehicle.

Original strategy

During an interview with CBS This Morning, Musk emphasized that Tesla Motors Inc (NASDAQ:TSLA) is executing its original strategy, which is to start with a pricey but low volume electric car, which was the Roadster sports car introduced in 2009 with a base price of more than $100,000.

According to Musk, the second step in the strategy of Tesla Motors Inc (NASDAQ:TSLA) is to develop mid-point priced vehicles— the Model S sports sedan and the Model X sports utility vehicle.

Tesla Motors Inc (NASDAQ:TSLA) is selling the Model S sports sedan for more than $70,000. The electric car manufacturer is expected to sell more than 40,000 units this year. The Model S vehicle is considered the safest car around. Despite the previous incidents wherein three Model S vehicles caught fire, there were no major injuries recorded.

The Model X sports utility vehicle, which will most likely be available 2015, will probably carry a price tag similar to the Model S. Last month, the electric car manufacturer’s president for worldwide sales and service Jerome Guillen said that they are working vigorously to complete the Model X to bring it to the market. Guillen added that Tesla Motors Inc (NASDAQ:TSLA) is expected to experience “reckless growth” this year, but that comment was later clarified as a mistranslation of “relentless growth.”

Mass market production

Musk said the next step for Tesla Motors Inc (NASDAQ:TSLA) is to go mainstream by developing more affordable electric cars in high volume. However, the company needs more capital to build factories to achieve its objective.

According to Musk, “In order to make any technology mass market, it takes time. You’ve got to go through major design iterations.” Musk added. “In order to afford those factories, you’ve got to raise a ton of money. And people will only give you money if you’ve shown some prior success.”

Thilo Kowlowski, auto industry analyst at Gartner commented, “This is hugely important for Tesla. This is ultimately the car that will make Tesla a household brand rather than just something in the premium segments.”

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