Earlier Model X Schedule Sends Tesla Motors, Inc. Stock Soaring

Tesla stock finished the day with nearly a 9% gain. Here's the back story.

Jun 16, 2014 at 4:40PM

While a report this morning from Financial Times may have served to help boost Tesla Motors (NASDAQ:TSLA) stock price a few percentage points, a story making rounds just hours later seems to have sent the stock through the roof. The stock ended the trading day up about 9%. The news comes straight from Tesla in the form of a production update on its next vehicle, the Model X.

Model X

Tesla Model X. Image source: Tesla Motors.

Tesla is ahead of schedule
What exactly is all the excitement about? Getting straight to the point, a comment in the letter from Tesla to Model X reservation holders this morning suggested that the company could be ahead of schedule with its plans to launch the Model X (ahead of its most recent statements about the car, at least; Tesla had delayed the Model X several times before the latest timeline):

"The first Model X cars for you, our reservation holders, will be produced starting in early 2015."

The wording suggests the company may be getting to Model X production earlier than it had last specified it would. Up until this point, Tesla was saying that it was "on track to ramp up production in the spring of 2015."

Could deliveries begin as early as the first quarter of 2015?

Model X

Image source: Tesla Motors.

Other news on the Model X from the letter? Unsurprisingly, Tesla confirmed that all-wheel drive will be standard, and the falcon wing doors will, indeed, be "a defining feature." The company asserts that the doors sill make getting in and out of the X "so much easier than would a conventional front-hinged door."

More surprisingly, Tesla said the third row would be optional. Before now, Tesla had only shown the Model X with three rows, so it wasn't clear if it would be offered with just two.

Just earlier this month at its annual shareholder meeting, Tesla said it was still facing challenges in getting the Model X exactly right for production. Tesla CEO Elon Musk insisted that the car must "blow people away." More specifically, Musk said one of the challenges was in making the production version meaningfully better than the prototype version.

But Tesla was, apparently, making progress:

I should say that the production version of the Model X actually looks different from this. It looks better. ... At Tesla, whenever we show a car as a demonstration item, the production car will always be better than what people saw.

And now, with earlier production planned, Tesla is seemingly more confident than ever in the production version of the SUV.

The implications
Beyond the obvious implications that this means customers will likely be receiving deliveries earlier than they thought, since Tesla said in its fourth-quarter letter to shareholders that it wouldn't ramp up production until the spring of 2015, there is another possible underlying inference.

As a supply-limited company, even when supply is ramping up as fast as possible, the major constraint for Tesla was batteries. Is it possible that Tesla has addressed this bottleneck on a more meaningful scale earlier on the timeline than it had planned?

Warren Buffett's worst auto-nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends and owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers