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Tesla's Model X Was a Mistake
- capkutay 11y agoThis may be my personal taste but does anyone else think that it's just ugly? I saw one in person the other day and it really looks like a big snail, especially compared to the sleek looking Porsche and BMW SUVs in the same price range.
- deleted 11y ago[deleted]
- LeifCarrotson 11y agoAre you talking about the BMW X5 and Porsche Cayenne? I think those are rather hideous vehicles. The designers clearly tried to retain some of the sedan branding and looks in front, just much taller, and weren't sure what to do in the back. Heck, a Chevy Suburban looks better! At least it has a consistent design philosophy!
- newman314 11y agoBMWs still suffer from Chris Bangle's legacy of flame surfacing. Personally, I think the Macan is a much sharper interpretation than the Cayenne. Tessa's design is blander and doesn't really have a brand specific cue other than that horrendous nose. That large piece of plastic over what would be traditionally the inlet just doesn't do it for me.
- Cshelton 11y agoThe Macan is one ridiculously good looking vehicle, especially in person. Small SUVs just aren't my type. I'm really looking forward to the 2017 Porsche Panamera, they are finally fixing the butt to make it look amazing, not awkward!
- charlesdm 11y agoThe Porsche Cayenne has been around for a long time though, and is in need of a refresh. The Macan is sparkling new.
- bborud 11y agoThe Cayenne looks like it is about to surface with a mouthful of krill.
- XJOKOLAT 11y agoI think they've hit the right note again. When I first saw the model S I thought it was nothing but but an overblown Mondeo. But it's grew on me quickly to the point that it's at the top of my list. There's something understated and smooth about it. It makes sense. I get the same feeling about the model X. It's all a matter of taste, but the Cayenne and the Macan are hideous in my opinion. And I love Porsche.
- fossuser 11y agoThis is overblown and the stock price being low is probably short sightedness (again) on the east coast due to oil prices. The Model X enabled Tesla to use the same core as the Model S while building and testing some new features during the construction of their giga-factory that will enable the Model 3. It also allows Tesla to stay in the press during that time (demonstrating new features, talking about the new car etc.). While delivery is a little delayed they've already sold over sixteen thousand Model Xs - I don't agree that it was a mistake.
- dragontamer 11y agoStock price isn't low at all. TSLA is still considered a bigger company than Fiat / Chrysler... by a significant margin... at its current price. East Coast guys are thinking "wtf? How can Fiat / Crysler / Dodge / Jeep / Ram / Ferrari COMBINED" be worth less than a company who currently only makes two cars?
- toomuchtodo 11y agoImagine if GM owned ExxonMobil. That's a better example of what Tesla is (an energy storage company that sells a product that uses their core product).
- sremani 11y agoFirst of Tesla stock is down because Detroit Auto Show has put a steady stream of EVs and PHEVs. At least in the immediate future Tesla is not going to own the low-end market. They are still executing their high-end. On battery side, LGChem and Samsung are doing great job and Tesla battery chemistry is neither that different or superior to them, so there is absolutely no differentiation there. Tesla stock is over priced, once the German Luxuries esp. BMW arm themselves with batteries there is going to be stupendous completion that would not justify their market value. On top of this, you have Apple getting into the think of things, at least rumors of it.
- toomuchtodo 11y ago
- strictnein 11y agoI'm not sure this makes sense: > "Tesla, like most Silicon Valley companies, uses most of its revenue to finance research and development for new products. Rolling out new products with minimal required development is crucial to this strategy" Those sentences just don't follow. They spend lots on R&D and they need to roll out new products with minimal R&D? And I'm pretty sure the majority of their revenue is spent building the cars. They did around $3.2 billion in revenue and sold 35,000 cars. Unless they somehow have unheard of margins of 50-60%, that means Tesla spends the large majority of their revenue on building vehicles. To me, this community blog post reads like they started with the contrarian clickbait title, and went from there.
- apendleton 11y agoIt's clumsily worded, but I think what they were going for is something like "Tesla, like most Silicon Valley companies, uses most of its revenue to finance research and development for new products, so profitability depends on maximizing the returns on that R&D investment." The idea was that the R&D necessary for the Model S was intense, and the hope was to be able to extract more value from that investment with another vehicle that largely reused Model S's tech.
- colechristensen 11y agoIt's just not a software company and too many people don't get that. They're building their brand and developing their technology and supply chain with elite vehicles developing the potential for profit explosions when they're ready to release a commodity vehicle to the masses.
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- _ph_ 11y agoSome decisions taken when designing the X might have been a mistake. But it would be too simple to blame all onto them. While initially, the X was planned as a minor bodywork modification of the Model S, the crazy success of the S gave Tesla the money and the time to make it a larger refinement of the S platform. In the meantime, the S also kept being updated. So the X is rather still part of the S platform and the real cheaper car will still be the Model 3. In that sense the Tesla plans did not change much. While not many X were delivered in 2015, they seemed to have started mass production literally in the last weeks of the year. They should be building several hundred of them per week now. That the X is even more expensive than the S is not a bad thing, considering that they have about 20k orders backlog. As long as they can sell any S or X they make, there is no hurry for the "cheap" model. Revenue per car is more important that total car number sold.
- sandstrom 11y agoI agree with most of this analysis. I think the reason they did the X was that when Model S was brand new they expected the market to 'max out' at ~20k vehicles a year (which wasn't unreasonable looking at other, similarly priced, niche premium brands). So, they wanted a SUV to sell more cars. Now, as everyone (especially Tesla) knows, Model S has been selling very well. So in hindsight it was a big waste of time/resources. But I can see why the mistake was made.
- _ph_ 11y agoWhy was it a waste of time/resources? From all we know, the X might even sell better than the S, the preorders are crazy. Which would make Tesla a much larger company than selling the S only.
- SuperChihuahua 11y agoBut they would have sold even more if they ignored the X and prioritized 3 which is the ultimate goal because they need the money
- bronson 11y agoCan't prioritize the 3 until the gigafactory comes online. Not point to making lots of cheap chassis if you don't have the batteries to put in them.
- _ph_ 11y agoI do think the X is making them way more money than the 3 could for quite some time, as the margins for the 3 are probably much less than those of the X. Only when they hit the 500k/year it might be the main moneymaker for Tesla.
- mikeryan 11y agoAssuming a limited number of design and engineering resources I think the article makes a sensible argument (though, really poorly written) that it would have made more business sense to prioritize those resources on getting a more mass market offering out to consumers, capturing that revenue stream and cash before prioritizing the X. Without knowing many of the details of Tesla this argument makes sense on it face. That being said there's a hefty amount of hindsight going into this analysis and I'd respect it more if the author made this call about 2-3 years ago.
- vadym909 11y agoI'm not sure what the author is getting at but I think the Model X is a mistake- mostly only because of the falcon doors. 1. It is too ostentatious for most people - especially in its biggest market- the bay area. You can hide a gold iphone or Rolex watch but you can't hide when you open the falcon door while dropping off your kids to school. 2. The door also drastically reduces the headroom for the 2nd row and it feels like a Nascar racing car with all kinds of bracing in the back. About making it easy to get into the 3rd row is not really true. It is no different than any 3 row SUVs. The tall fixed headrests also limit visibility in the back rows. 3. I think Elon is a pragmatist and if he decides to change the falcon doors to regular doors, I think the ModelX will trump Acura MDX and BMWX5 in Sales very easily. Everything else in the ModelX just blows everyone else out of the water.
- gozur88 11y ago>It is too ostentatious for most people - especially in its biggest market- the bay area. You can hide a gold iphone or Rolex watch but you can't hide when you open the falcon door while dropping off your kids to school. For a lot of people the whole point of paying $130k for a car is that other people know you can pay $130k for a car. Also, is the SF bay area really Tesla's biggest market? There aren't that many people in SF compared to, say, Los Angeles.
- dtparr 11y agoHmm, now I'm curious what the heat map for, say, > $100k cars looks like, though I'm guessing perhaps something like: https://xkcd.com/1138/ https://xkcd.com/1138/ Maybe what I really want is 100k cars per capita?
- njharman 11y agoIf you think ostentatious is a problem in the luxury market you don't know the luxury market. Also why do you imagine bay area is X or Tesla's biggest market?
- FussyZeus 11y agoI think mistake is a strong word. It clearly wasn't part of the original plan, at least where it was, and did take (and continues to take) a lot of time and effort on the part of Tesla to get it to market already. However, Tesla was moving into SUVs eventually, they would have to, and the X if nothing else provides a ton of useful data and experience to them down the line. Best idea? Probably not and maybe a little premature too, but the article makes it sound like Tesla's going out of business because of it and I don't think it's nearly that bad.
- vvanders 11y agoThe one thing that article totally misses is the Dual Motor drivetrain that was developed for the Model X was what enabled the 85D/P85D/P90DL which moved the Model S from "awesome" to "supercar" territory. Also, there was many similar slow rollout/complexity issues with the Model S first shipped, I'm sure they'll be fine.
- elchief 11y agoSo, decent plan, imperfect outcome?
- D-Coder 11y agoStory of my life.
- tn13 11y agoTesla in general looks like a big mistake to me. Whatever good things Tesla has seen so far is probably because Musk's own personality and PR rather than the actual performance of the car itself.
- peeters 11y agoWhy do you say that? I mean every single review I saw of the Model S was fairly deliberate about praising the performance of the car. What's the counter point to that?
- vajrabum 11y agoHave you ridden in one? The performance is ridiculous, to the point of being scary.
- njharman 11y agoWhat kind of performance? Consumer Reports rated so highly they had to redo their test (it got over 100%). It's acceleration is near supercar territory or just "really fucking fast" with out ludicris. 98% of owners said they'd buy again. Compared to super cars and high end sports cars it's corning sucks. But, 1)remember S is a 4 door sedan not a sports car 2) like to see any electric car with more than 40mi range do better. And I think it's range is one of the top for production electric vehicles. S has met or beat sales and all Tesla models have large pre and back orders. So, really, what performance are you referring to?
- tn13 11y agoI don't have much faith in Consumer Reports may be they wanted to be in good books of Mr. Musk.
- jernfrost 11y agoThis is just en eerie reminder of the same sort of dismissals against Steve Jobs: just a sales guy. Just good PR. Unfortunately for you this cheapo trick doesn't work with Elon Musk as it is very well known and documented how razor sharp he is when it comes to science and technology. He did most of the programming himself for his internet startup. He learned rocket science from the ground up without going to uni to get a degree. He impresses people with decades in the rocket industry with his insights and understanding of the subject. Elon Musk understand the technical details of his products exceptionally well. He knows the inside out of the Falcon 9 rocket. This isn't just some sales guy.
- noipv4 11y agoTesla should get Model 3 out quickly. That's where the meat of the market is at ~30K USD. That's where Tesla will learn what real customer service is.
- callesgg 11y agoHigh stock prices does not mean a company is doing well. It just means that people used to think the stock of the company would go up. Following that: low stock prices does not mean a company is not doing well.
- gizmo 11y agoOver-engineering the Model X is in my view clearly a mistake. Not a huge mistake though. The big problem for Tesla is scaling up. Producing the model 3 at scale at a 40k price tag is much harder than anything they have done so far. It has taken competing car companies decades to get to the point where cheap reliable cars just roll of the factory line. Just quality control alone is a huge problem at scale. Sourcing all materials at scale is enormously difficult. In manufacturing scale is everything. In terms of interior design and finish Tesla is way behind BMW. They don't have the factories BMW does or any of the infrastructure and operational expertise. Tesla won't be able to compete in more the price sensitive "3" segment. Perhaps Tesla would have been better if they only produced fast luxury cars. Too late for that now, though. The stock is priced based on promises of a mass adoption of the Model 3. A promise that they can't possibly deliver on. Unless Elon pulls another rabbit out of his hat. Wouldn't be the first time.
- _ph_ 11y agoWhile I did not have the chance yet to compare an X to the BMW offerings, it is a notable fact, that Tesla in the meanwhile for both the X and the S is working with the same German companies which supply BMW and Audi. The interior of the X is made by a company usually doing Audis, and the suspension is made by Continental. They also have Bosch components, Harman audio etc. That should put them quite close in quality to the German brands.
- steejk 11y agoApart from quality comes from successful integration of all the components together rather than individually.
- gizmo 11y agoI've heard many people express disappointment at the fit and finish of the model S (cheap components, water leakage, etc), but nothing quite as harsh as the review in BGR: > The fit and finish of a Tesla, especially a $140,000 Tesla, is quite frankly embarrassing. Panels with gaps, cheap plastic components, a decade-old Mercedes shifter, and none of the high-end amenities of luxury cars. The doors are, quite frankly, crap. The leather is medium grade at best. The seats are terrible (disclosure: I have not sat in the brand new Model S seats, though they are still one piece with no power-adjustable lumbar, etc). I don't know if the Model X is better. http://bgr.com/2015/01/14/tesla-tsla-sales-market-data-model-s-d/ http://bgr.com/2015/01/14/tesla-tsla-sales-market-data-model...
- SmokyBorbon 11y agoPhase 1 : Collect underpants Phase 2 : ? Phase 3 : Expand downmarket
- bborud 11y agoI think it is amazing that after a decade in the mainstream spotlight, journalists still don't seem to do their homework. Simpleminded twaddle.
- kevinstubbs 11y agoElon took a risk, it didn't pay off, and maybe hurt Tesla in the short term. They learned a lot of lessons from it and survived, so this should help them in the long term.
- njharman 11y agoTell me in 3 years if it was a mistake. Until then you're guessing out your ass, hoping to drive traffic to your blog.
- sixQuarks 11y agoNot only that, why is he all of a sudden claiming this now, AFTER the stock has tanked? If he felt that way, he should have been talking about it when the stock was much higher. it's easy to say things after the fact.
- melted 11y agoCouch infantry is at it again. Stock price doesn't mean a damn to a company unless it's about to issue more shares. It only has any meaning to people who own its stock. Model X is a good product, and one without peer in the luxury segment. Who gives a shit what some jerkwad analyst thinks about the stock?
- jernfrost 11y agoKind of early to start making conclusions isn't it? Stumbling world economy and record low oil prices. Not exactly a receipt of Tesla success. I'd give at least 6 more months before concluding anything.