Tesla (NASDAQ:TSLA) Withholds Model X


The third quarter earnings report for the Tesla Motors (NASDAQ:TSLA) have been released. These figures are quite close to the analysts’ projections. The non-GAAP earnings per share have totaled at $0.02. This is a much better figure than the Wall Street’s projection of per share loss of $0.01. The revenue for the current period have summed at $852 million, with the company delivering 7,785 S vehicle models. However, the company’s decision to withhold delivery of its latest Model X is being scrutinized in many different views.

Tesla Motors (NASDAQ:TSLA) readies itself for the launch of its Model X in to the market, in the later part of the year 2015, with a most probable appearance in the third quarter. On three different occasions in the past, Tesla Motors (NASDAQ:TSLA) has withheld the delivery of its Model X. The anticipated vehicle has kept customers waiting for a possible launch since 2012, when the company started talking preorders. This lack of information on a potential launch is causing frustration amongst buyers and fans of the electric automobile manufacturers. This could have caused a lot of concerns to the investors, however, they seem to be at ease with the decision of Tesla Motors (NASDAQ:TSLA) to delay the launch of Model X.

There may be several reasons to withhold the launch automobile into the market. If it is because Tesla Motors (NASDAQ:TSLA) is putting in maximum efforts to bring the finest conceivable product into the market, then the loyal investors should back this decision. One such example from the past is Tesla Motors (NASDAQ:TSLA)’s S sedan that was a year behind its speculated launch date. However, once the zero-emissions vehicle entered the market, it received mostly positive reviews, with Motor Trend going as far as terming it Car of the Year in 2013. The company’s perception is well addressed in the statement released by Elon Musk, chief executive for Tesla Motors (NASDAQ:TSLA). He stated that the company doesn’t mind forgoing revenue, and aims to bring in a model that will please customers.

Another reason, Tesla Motors (NASDAQ:TSLA) has been in the news is failure to meet delivery targets for 2014. The company missed the unit manufacture figure by 2000 cars in the third quarter. Hence, the company is expected to bring 33,000 cares to the market this year. This is a 5% – 7% dip from the previous year’s figure. Long-term investors don’t feel threatened by this decline in quantity, as they still expect a 50% improvement, when compared with last year’s results.

Tesla Motors (NASDAQ:TSLA) has maintained that they don’t feel they need to advertise their products. The product performance speaks for itself and customers need not be convinced with ad campaigns. Tesla Motors (NASDAQ:TSLA) doesn’t need to build brand awareness, as demand for their various models has always been an exceeded figure over supply at hand.

Tesla Motors (NASDAQ:TSLA) has prioritized long-term triumph over short-term profits. The company’s ability to look at the bigger picture should be appreciated by investors and customers alike.