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The Moment for Truth for Tesla as Model X Finally Debuts

Two years late, electric SUV the real test for CEO Elon Musk’s venture.

by on Sep.29, 2015

The new Tesla Model X could be outselling the Model S sedan by this time next year.

Has Tesla really sparked a revolution, or is it about to come unplugged? The world may get a better sense of the battery-electric automaker’s future later today when it finally pulls the covers off the new Model X.

The electric SUV will join the Model S as the second car in Tesla’s line-up, and once it reaches market, more than two years behind schedule, it could nearly double the California carmaker’s annual sales volume, at least if founder and CEO Elon Musk’s projections prove accurate.

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While Tesla’s transition into a truly mainstream manufacturer will have to wait a couple more years, with the planned addition of the more moderately priced Model III, the Model X – with its distinctive “falcon doors” — will give both consumers and investors a good sense of whether Tesla is more than just a one-shot wonder.

Development of the SUV strained the resources of Tesla far beyond what Musk and company anticipated. The South African-born entrepreneur described the project as “challenging,” in a conference call following the announcement of Tesla’s second-quarter earnings last month. The original idea was to largely share the basic platform and critical components of the well-reviewed Model S but, in the hand, the company’s engineers had to all but start over again.

The Tesla Model X features standard front doors but unique "falcon doors" in back.

In the process, they burned through massive amounts of cash. Despite a sky-high stock price, Tesla itself ended the second quarter with barely $1 billion in its bank account, a pittance by automotive standards. It was forced to launch a new stock offering – which underscored the market’s continuing optimism by generating $738 million, or nearly 50% more than originally expected.

What’s left after work on the Model S wraps up will now go into the development of the mid-range Model III sedan which will not reach showrooms until sometime in 2018, though Tesla plans to begin taking orders next spring. That’s a long ways away, and Tesla needs to start generating some real profits before then – not by using its own bookkeeping but by more traditionally accepted accounting.

(Tesla set to show, begin taking orders for, Model III. Click Here for more.)

It will take some time to fully ramp up production of the Model X. For all of 2015, Tesla now expects to ship between 50,000 and 55,000 vehicles – slightly less than it had earlier forecast. The goal, Musk explained, is to get production up to around 1,800 vehicles a week by early next year. Whether it can get there is far from certain. For the moment, Tesla is only gearing up to deliver the limited Signature Edition version to select customers who signed on early.

The Model X at the 2012 Geneva Motor Show.

And they’ll pay for the privilege. The Tesla Model X will be even more expensive than the Model S sedan – which itself can top $110,000 fully loaded. Some Signature models are expected to nudge up and beyond $144,000.

But the Model X targets one of the fastest-growing segments in the automotive market, SUVs and crossover-utility vehicles now outselling sedans in the U.S. And, as Mercedes-Benz, BMW and, soon, Bentley, Aston Martin and Rolls-Royce have discovered, there’s a market for expensive utility vehicles.

And it’s being billed almost like an automotive second coming. “The Model X may arguably be a better SUV than the Model S is a Sedan,” declared the ever ebullient Musk, who is a near fanatic user of Twitter. That’s no small self-praise considering the battery sedan recently managed to score 103 points on the 100-point scale Consumer Reports uses to rate vehicles.

Tesla is saving many of the details for the Tuesday night unveiling but expect the Model X to share the basic powertrain technology found in the Model S, which means a mix of models upgrading both features and range. The top version is expected to be a variation of the sedan’s P90d, with two motors – one driving each axle to create an electric version of all-wheel-drive.

An early version of the video display in the Model X makes an iPad seem miniscule.

Customers will be able to upgrade the drivetrain to so-called Ludicrous Mode, which is expected to get the big SUV from 0 to 60 mph in a mere 3.2 seconds, about 0.2 seconds slower than the Model S.

Information that showed up on the Tesla site recently suggests the maker was able to increase the range of the top model by 4%, to around 250 miles per charge. The Model X, like the Model S, will rely on laptop computer-style batteries packaged into the vehicle’s load floor. Tesla hopes to begin producing those lithium-ion batteries at its new Megafactory in Reno, Nevada late next year.

(Tesla ups the range of the Model X. Click Here for more on that story.)

Visually, the Model X looks like a cross between a coupe and a tall wagon, and the overall design will be immediately recognizable to those familiar with the Model S. But the ute’s most striking feature will be those distinctive Falcon doors. They’re similar to gull wings doors, like those used on the old Mercedes-Benz SLR. But they fold slightly when opened, making it easier to operate them in a garage or other tight spots.

The less complex doors on the Tesla Model S have given owners – and the maker – some occasional headaches. Indeed, Consumer Reports may love the electric sedan now, but earlier this year it griped that one test version was “undriveable” because of problems with its electrically operated doors.

The Audi e-tron Quattro SUV Concept will be followed by a production model around 2018.

Like its more traditional automotive competitors, Tesla has to make sure that it can build in the level of quality that high-line buyers expect, especially as it aims to broaden its appeal beyond the true believers that have made up its initial buyer base.

Complicating matters, the maker is facing new competition from a variety of luxury brands, Mercedes-Benz, BMW and Audi among those set to launch longer-range electric SUVs in the near future. Audi showed off the e-tron Quattro concept at this month’s Frankfurt Motor Show and plans to have it in showrooms by 2018.

So, Tesla has to not just deliver an interesting product but one that somehow needs to score even higher on the Consumer Reports charts. If it falters with the Model X it will have a tough time keeping the energy building as it moves on to the Model III.

(Audi electrifies with e-tron Quattro concept. Click Here to check it out.)

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One Response to “The Moment for Truth for Tesla as Model X Finally Debuts”

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