More than a year after his initial deadline, Tesla Motors CEO Elon Musk is handing over the Model X luxury electric SUV to its first customer. The Tuesday evening event at the company’s Fremont, California, factory will feature a family-friendly luxury electric vehicle with Delorian-like "falcon wing" doors. The vehicle is central to Tesla’s plan to achieve the ambitious goal of delivering a less expensive, mass-market electric car by the end of the decade.
“Consumers have been buying SUVs in droves over the last couple years, yet there are very few electric vehicles in SUV form,” said Akshay Anand, an analyst at Kelley Blue Book’s KBB.com. “The Model X aims to fill that need, all with a brand that consumers seem to aspire to.”
Those who want to watch the event unfold can visit Tesla’s live stream Web page here starting at 11 p.m. EDT, an hour after the event begins. Tesla Motors’ Twitter feed is also likely to be active with images and messages from the event.
Though the world won’t learn price or other details until Tuesday evening’s event, the Model X will not be inexpensive, even by luxury SUV standards. This relegates the SUV to wealthy, early adopters, many of whom live in the company’s home state of California, the biggest market for the Tesla Model S in the U.S.
Globally, Tesla’s strength lies in Norway, where generous electric-car tax breaks give the Model S a huge price advantage over its gas-burning peers, like the Audi S6.
“There's little doubt in the marketplace that Model X will be successful with its audience of wealthy early adopters,” said Jessica Caldwell, director of industry anlysis at Edmunds.com. “But today's launch is a quick stop on a longer and more important journey. The real test for Tesla comes down the road when it launches the Model 3, when we'll learn for sure if mainstream car buyers are ready to make the switch from gas to electric.”
The $35,000 Telsa Model 3 is due out in 2018 as the company uses the revenue from the sale of its luxury models to bring down battery prices.
While low gasoline prices have been luring consumers away from electric cars like the Nissan Leaf, Tesla has been shielded from the drop in demand, largely because its wealthy buyers are less concerned about fuel prices and are buying Tesla cars as status symbols.
A detailed but unofficial tally from Tesla fans indicates customers have reserved about 28,000 Model X SUVs, mostly in the U.S.
Tesla Motors Inc. (NYSE:TSLA) share price was up 1.67 percent to $252.59 in Tuesday morning trading.
The Model X was initially scheduled for a late 2014 release, but the car’s production and delivery dates were delayed three times so Tesla could focus on Model S production. Late last year, Musk said in a conference call the Model X's falcon wing doors posed an immense engineering challenge to ensure they work properly once the vehicle enters full production.
"It's worth saying that making one of something is quite easy," he said during a third quarter 2014 conference call. "Making lots of something consistently that's going to last a long time is extremely hard. In fact, it is way harder to make the machine that makes the machine than it is to make the machine in the first place."
In August, Tesla downgraded its annual sales forecast for the year, from 55,000 to as few as 50,000. Meeting expected sales, revenue and profit margin targets is vital to keeping investors satisfied. The company has been bleeding cash as it works on various fronts to reach a goal of selling 500,000 electric cars a year by 2020, including the $35,000 Model 3 due in 2018.
A video recently posted to YouTube shows the Tesla Model X “falcon wing” door in action in the parking lot of what appears to be the company’s Fremont, California, facility. The vehicle in the video is slightly disguised with white tape covering portions of the rear headlights.