Tesla's Model X, the company's next gen vehicle, will push the company's stock price past $265 a share, according to Morgan Stanley.
Tesla Motors is just beginning production of the much-delayed Model X, its second major product line, and should have the first of the battery-electric SUVs in showrooms by early next year, and barring some unforeseen problems, it could quickly overshadow the maker’s current offering, the Model S sedan, according to a new report.
The Model X is “ready to feast” on a market looking for an alternative to conventional, high-line luxury SUVs and CUVs, forecasts financial firm Morgan Stanley, which also anticipates the demand for the new battery-car will drive Tesla’s stock to a new high, well above the maker’s previous peak of $265.64 a share.
The word, “bullish,” doesn’t come close to describing the mood at Morgan Stanley, which, despite not yet driving the new battery-ute, is predicting the Model X will “sweep every Car of the Year award on offer by the automotive media.” The Model S took several key awards, including the coveted Motor Trend Car of the Year trophy, though limited availability kept it from a podium finish in other automotive battles, such as the North American Car of the Year.
Tesla hasn’t revealed much about the Model X yet, though it is expected to share the underlying platform and the basic powertrain technology found in the Model S sedan – though it is likely to see at least some updates, including the latest available lithium-ion battery chemistry. That could help the ute maintain the general range and performance numbers of the lighter sedan – nearly 300 miles on a full charge with the 85 kilowatt-hour battery pack and 0 to 60 launch times comparable to a Porsche 911.
Tesla's Model X is expected to hit showrooms next year.
The SUV will also share some of the visual features of the sedan, including the increasingly familiar Tesla grille and logo. But one of its unique design elements will be its so-called “falcon doors.” Similar to the gullwing doors found on some luxury cars, the Model X portals have an articulating middle hinge so that they can be opened in side of a modest-sized garage without hitting the ceiling.
One reason why Morgan Stanley appears so upbeat, notes the Los Angeles Times, is that it has been gaining momentum in the market with the original sedan – while it has also collected plenty of cash from recent stock sales to devote to a more aggressive launch.
Whether Tesla will actually stage a marketing campaign for the Model X remains to be seen, however. It has largely relied on intense media coverage and word-of-mouth to build momentum for its battery sedan, something analysts note was easier for a company just ramping up production. With its Fremont, California, factory now accelerating to higher production levels, however, Tesla may finally need to toot its own battery-powered horn.
If the research report is accurate, the Model X will not only outsell the Model S by 2016, but also could wind up dominating the premium luxury SUV/CUV segment, as well.
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The firm is forecasting that Tesla will offer the new ute for about 10% more than it’s currently getting for the sedan, which would mean a starting price of around $71,000. A base Model S comes in around $65,000, but it can reach around $110,000 fully loaded.
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The Model X could dominate in a segment led by the recently updated Cadillac Escalade, and the Mercedes-Benz GL, with Lincoln trying to regain momentum with its newly updated Navigator.
A strong launch could add still more power to Tesla’s high-flying stock, which peaked at just above $265 a share earlier this year, though it has settled back to a still strong $260 this week. Predicting the possibility of reaching $320, Morgan Stanley is billing the maker as “the top pick in US autos.”
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Not everyone is quite as bullish. And there are some reasons for caution, other analysts note. As TheDetroitBureau.com reported earlier this week, there have been signs of quality problems lately. Consumer Reports magazine noted problems with its long-term test vehicle, stating, “Given the number of bits and pieces Tesla has replaced on our car, it might be tempting to guess that its reliability score will go down.”
For its part, Morgan Stanley did point out that, “It is worth noting that the commercial launch had been delayed by 6-9 months.”
Tesla now says the launch is on track – even though it has yet to begin testing early production models. It hopes to begin those tests shortly.
It looks like the doors are not going to work well in the garage. This looks like more wishful thinking. I wonder how much stock ms has bought from the carnival huckster.
This looks like a Honda Crosstour, a market failure of a vehicle. Crosstour failed because it was either a bloated sedan or a CUV without useful room. The customer didn’t want either interpretation. So why is the Model X copying it? Design takes years and Tesla may have guessed this vehicle form factor would be popular. Oops. The X needs more height on the C pillar and an added D pillar. Maybe the X is for show around town and not for real use.
MS is certainly looking to cash in.
I think this should be labeled CUV due to its proportions. But honestly, it can compete in the lux SUV market b/c people who own them have them for status anyway, not for towing / hauling. The only lux SUV I’ve seen used as a serious work vehicle was a Porsche Cayanne, and I had to go all the way to Belgium to witness it. Father and son were using it to tow plumbing supplies for their business.
My chips are always in the corner of Elon Musk. He is the greatest visionary of our time.
i really think that ELON is a true visionary and he is the future henry ford of the 21st century.
i really think that ELON is a true visionary and his cars will all be a success. very soon and in few years we see that tesla will sell more than toyota or GM .