4 Reasons Why Tesla (TSLA) Could Delay the Model X

Morgan Stanley analyst Adam Jonas weighed on Tesla Motors (NASDAQ: TSLA) Thursday saying there is reasonable risk to a slight delay in the delivery of the Model X into the third quarter of 2015, although they would use any weakness as a result to increase exposure to what they call "the world's most important car company."

Jonas said their expectation of a possible delay in the Model X is based solely on the opinion of Morgan Stanley’s global auto team. As recently as the firm's Industrials and Autos conference on September 15th, Tesla has reiterated its expectation that the Model X will see its first deliveries to customers by 2Q15. While they have no information to contradict the company’s expectation, they would allow for a possible delay in the launch and/or ramp of the vehicle due to a variety of reasons:

1. It’s common for major auto launches to come a bit later than originally expected. "Typically, the bigger the launch, the more likely it is to be delayed," the analyst commented.

2. Prototypes have been difficult to spot. "... we just find it unusual that these prototypes have not been spotted more frequently given the intense public interest in the product."

3. Introduction of AWD versions of the Model S were a surprise to us, suggests more ‘spacing’ ahead of Model X launch. "Once again, while we are only connecting the loosely plotted dots here, we believe the introduction of an AWD Model S (which we expect could ultimately account for the majority of all Model S orders) suggests a bit more temporal ‘spacing’ ahead of a Model X launch... potentially consistent with a launch a bit later than 2Q15. We could very well be wrong here."

4. If Tesla had a chance to make the Model X even more special… isn’t it worth waiting a bit longer for? "We think so!"

Overall, Jonas expect the Model X to go dynamite fishing in the global premium SUV segment. "While the entry price could be 5 to 10% above the entry level MSRP of today’s Model S, we expect the Model X to be loaded with far higher levels of standard equipment, particularly in areas of comfort, safety and drivetrain. The SUV segment addresses a far wider audience across genders, utility applications and geographic regions vis-à-vis the premium 4-door sedan segment. While not explicitly modeled in our earnings forecasts at this time, we see potential for Model X volume (and related derivatives, including an electric pickup truck) to be significantly higher than the Model S family."

The firm maintained an Overweight rating and price target of $320 on TSLA.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Shares of Tesla Motors closed at $229.70 yesterday.

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