Full Production Of Tesla Model X Not Expected Until December - Rumor?

Problems with suppliers will delay full production of the Tesla Model X until December or beyond, sources tell Green Car Reports. Those sources say Tesla has still not placed orders with at least three Tier-1 suppliers for necessary Model X components. The company continues to negotiate with those suppliers, but the parts in question, including certain high-strength aluminum components as well as more generic parts like brake lines, will be necessary before volume production can begin.

Allowing time for tooling, testing, and a ramp-up of component production means any kind of volume production is at least three months away. The sources suggest full production could be delayed until December or even next January.

Why is this important? Because Elon Musk’s Tesla empire is built on hype, hyperbole and high hopes. The company’s stock price today is based on what investors think the stock will be worth 5 years from now, when Musk says Tesla will be building 500,000 cars a year. Of course, he also said a few months ago that the company will deliver 55,000 cars in 2015. Now it looks like Tesla could struggle to deliver 50,000 cars.

Is a difference of 5,000 cars that big a deal? It is for a low-volume company like Tesla, which relies on incoming cash to keep the business afloat while it spends money like a drunken sailor to complete the Supercharger network, build its Gigafactory, get the Model X on the road, move forward with the proposed Model 3, expand in China, and get its battery storage business started. Putting this in perspective, 5,000 fewer cars for Tesla is like 850,00 fewer cars for General Motors.

Tesla’s market valuation is like a balloon — filled with hot air. If you believe everything Elon Musk says, you sleep very well at night, knowing your shares will probably be more valuable tomorrow. But if there is a crisis in confidence among investors because of Musk’s habit of presenting timelines he can’t stick to, that valuation could deflate like a balloon that has been pricked by a pin.

Sadly, Chairman Musk is very much like the boy who cried “Wolf!” He is an amiable fellow and people want to believe in him, but he has a disquieting tendency to over-promise on timelines. Clearly, the Model X is critical to the company’s success. One of Musk’s promises was that the first cars would be delivered in Q3. We’ll see when they start rolling off the line and in what numbers.

Quarter 2 deliveries of the Model S were above the company’s guidance (11,532 vs 11,507), and production was even higher at 12,807, but the big story of the year is supposed to be the Model X, and it seems part of the story is a difficult production ramp-up, and that is apparently centered around second-row seats that are something akin to a sculptural work of art and like nothing we’ve seen before. We’ll have to see if they live up to their hype.