While a report this morning from Financial Times may have served to help boost Tesla Motors 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.
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?
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.
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?
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The article Earlier Model X Schedule Sends Tesla Motors, Inc. Stock Soaring originally appeared on Fool.com.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.
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