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0 pointsdragontamer9y ago0 comments

I disagree.

Tesla only had to go Model S -> Model 3, just as originally planned, and they'd be much more profitable than today. Model X, despite its 25% margins or so, isn't making money due to manufacturing issues. Its too complicated with its Falcon doors, and doesn't really have an impact from a sales or marketing perspective.

Instead, Tesla spends billions ramping up Model X, only for GM Bolt to release before the Tesla Model 3. BMW and other companies are catching up as well.

Even the Nissan Leaf may release a 200+ mile model before Tesla's Model 3, all because of the delays incurred with the Model X divergence.

I really think the Model X divergence was a mistake. If Model 3 launched just a year earlier with more money in the bank, Tesla would be in a much healthier position.

0 comments

marvin9y ago

I'm undecided on whether Model X was a mistake even when seen in retrospect. It might be the case. But assuming that it was, Tesla couldn't have known this beforehand. Model S demand turned out to be more than twice as high as Tesla initially expected -- at least six months of the Model X delay was caused by the deliberate decision to increase Model S production rather than carry on with the initial plan to produce Model X right away. Maybe Tesla could have backed water at this point, but I'm not sure that it would have been a good risk-adjusted move, given that Model X represents very good diversification in the premium-vehicle segment. There is low overlap between luxury sedan and luxury SUV buyers.

Model X was initially thought necessary to produce enough revenue through the time at which Li-ion batteries could be produced cheaply enough in large quantities to launch a cheaper, good electric car. That the Model S turned out to be so popular wasn't at all obvious in 2012, when it first entered production.

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