Tesla Model X Will Make The Tesla Model S Look Like Chopped Liver, Morgan Stanley Analyst Says

 @MeaganKaym.clark@ibtimes.com on August 06 2014 1:27 PM
Tesla Model X
Franz Von Holzhausen, Chief Designer for Tesla, speaks next to the Model X Concept SUV at the North American International Auto Show in Detroit, Michigan January 15, 2013. Telsa is investing heavily in the new vehicle in 2014 ahead of its expected release next spring. Reuters/James Fassinger

Tesla Motors’ electric crossover sport utility Model X vehicle will make a huge splash in the automobile market next year, with potential to be far more successful at a much better value than the Tesla Model S luxury electric sedan, Morgan Stanley analyst Adam Jonas said in a research note Wednesday.

The Tesla Model X will make the Model S luxury electric sedan look like chopped liver and silence comments that Tesla (NASDAQ:TSLA) is a “one-hit wonder” with the Model S, he said.

Tesla’s Model S and Model X cars are the only two electric cars in the luxury segment. The Model S debuted in late 2012 and the Model X is due out next spring. A third-generation Tesla car, the Model 3, will reach for a wider buyership at around $35,000 by 2017, according to the company. The Tesla Model S sells for about $71,000 in the U.S.

“We’d be disappointed if the Model X did not sweep every major Car of the Year award on offer by the automotive media,” Jonas said. Tesla Motors has learned many lessons since launching the Model S and has far greater financial and technical resources now that it’s pouring into the Tesla Model X line, he said.

“Additionally, many key suppliers who refused to work with Tesla at the time of the Model S will participate in commercializing the Tesla Model X,” Jonas said. “It is in Tesla’s interest to under-sell expectations of the Model X’s capabilities while it is still in the early stages of the global roll-out of the Model S."

Tesla originally planned to launch the Model X in 2014 but delayed the debut by six to nine months. The company has been ramping up production capacity in recent months. 

Jonas thinks Tesla Model X sales can pass sales of Model S in global volume by the end of 2016 if not 2018, given the size of the crossover and sport-utility vehicle market in the U.S. and China.

Tesla stock climbed 4 percent by midday Wednesday after Jonas’ praise. 

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