Does The Model X Ramp Spell Long Term Trouble For Tesla?

 

Tesla Model X

Model X Sales Ramp

If you read the news and analysis about Tesla Motors (TSLA), there is widespread doom and gloom, especially about the Model X sales ramp. The Model X is no doubt a complicated vehicle and Tesla has had a lot of trouble producing the vehicle. It brought seat production in-house because suppliers couldn't make a seat to Tesla specifications. The manufacturer for the mechanism for the Falcon Wing door couldn't deliver and is currently being sued. In spite of all this Tesla managed over 200 deliveries (actual sales, they produced more) of the car last year and is currently expecting the order backlog to clear by summer with new orders expected to be delivered mid-late 2016.

However, the Model X backlog is estimated to be over 20,000 orders. If Tesla manages to clear the backlog by the end of the year and squeeze in a few more orders, it will be the fastest ramped alternative vehicle in history, tying or even beating the current record holder, which is none other than Tesla's own Model S.

So while people look at the daily news and speculation, Tesla, with all its problems, is expected to pull off a feat that even other established 100 year old manufacturers are unable to accomplish.

Here is what the sales ramps of the Toyota (TM) Prius, Chevy (GM) Volt, BMW (BAMXF) i3 and Nissan (NSANY) Leaf look like compared to the sales of the Tesla Model S and my expectations of 25,000 Model X to be delivered in 2016.

This is in spite of the fact that the Model S and Model X are from a brand new auto manufacturer with no experience making cars. And in spite of the fact that the Model S/X are vehicles that compete in segments with smaller volumes priced at nearly double or more than these competing vehicles. While alternative fuels are not a focus at other companies, with decades of experience, one would think that they can outsell a fledgling automaker with no experience? The comparisons do not end there. With their first sedan and SUV, Tesla has managed to create the longest range EVs, the fast accelerating cars in their segments among other firsts like OTA updates. And Tesla even managed to get a 5 star safety rating in all categories for their car, a feat that other manufacturers are not yet able to accomplish across their entire fleets.

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Disclosure: Long TSLA.

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