Tesla reported second-quarter earnings on Wednesday and beat expectations but trimmed its production outlook. On a conference call with analysts after the numbers hit, CEO Elon Musk fielded questions.
Some of the big ones related to the launch of the Model X crossover SUV, later in the third quarter.
In the shareholder letter that Tesla published, the company said that in “the coming months we are growing from a single product to a multi-product company,” calling it a “milestone in the maturation of Tesla.”
Tesla has been selling only one car, the Model S sedan.
It appears from Musk’s comments that Model X production has been tricky. The vehicle is currently undergoing testing on the road, and Tesla is preparing to ramp up production to begin fulfilling pre-orders this year. Both the Model X and the Model S will be built on the same assembly line. And while most of the kinks have been worked out on building the Model S, the Model X is another story.
“It may be the hardest car to build in the world,” Musk said.
We’ll take Musk’s word for it, and he has declared that the Model X is going to blow everyone away when it hits the streets.
But it’s also just a crossover, albeit one with a exotic “falcon wing” door design. The world’s car makers are cranking this type of vehicle out in impressive numbers right now, given how popular crossover SUVs are with customers these days. We expect the Model X to be innovative. But we also expect it to look more or less like a normal car.
Musk indicated that a sticking point with the vehicle has been the rear seats, which he has on more than one occasion described as sculptural. The falcon-wing doors, according to Musk, haven’t posed the manufacturing issues that some thought they would.
The bottom line is that Tesla has been a company building one car in one factory. It will soon become a car that will build two cars in one factory. The Model S is a fairly amazing car, and the Model X is likely to reframe our ideas about what an SUV should be. But when it comes to production, Tesla is still learning its way.
As reported by Business Insider