Model X reveal impact on TSLA

[eloder]

Apparently, I may have been optimistic when I estimated 25% cancellation rate, if the seats don't fold or stow in some way. It makes complete sense, of course. Being in the premium/luxury segment does not exempt the car company from meeting the basic needs of the customer.

(The sample size is of course not huge, and there is probably some selection bias involved, as well as various other factors that skew the poll.)

No other car will come close to matching MX cargo space used by real-world, average individuals (not talking about plywood haulers, or those who need two folded rows of seats for camping trips but only take one other passenger with them on the trip). No other car will have a cavernous frunk available.

Even if they don't fold flat in any configuration (highly doubtful standard seats won't, I can see why "rear executive" do not fold given how they differ in the Model S), there's just simply not enough people who haul plywood while also simultaneously not taking more than one passenger somewhere.

People are applying their own personal over-exaggerated needs of space, much like the countlessly empty pickup truck beds I see on a daily basis. Many people are thinking of the need to fold down seats on significantly smaller vehicles, or vehicles with only two seat rows and not three.

I simply see this as false outrage, and I don't think Tesla will be affected in the slightest. Even assuming there's no second row folding whatsoever, there are a ton of people who would love to have a performance car but right now are only limited to boring minivans and slow competitors. A big appeal of the Model S is that it is both a family sedan and a sports car on the weekends, and the same is now true of a Model X for bigger families. People will love it.

Not to echo earlier comments endlessly, but Tesla's specialty is incredible electric drivetrains and a car designed from the ground-up to be electric (enabling things like frunks). People buy Honda minivans for pure utility and folding seats. People buying a Tesla for any reason are going to have much different reasons for doing so, until we have an econo-model available.

And also to echo, any signature not certain about ordering sight unseen can defer, and then get a full and complete refund if not satisfied post-revealed. With a 27k and fast-growing waiting list, Tesla and TSLA will see zero realistic impact from "foldgate". Reviews aren't going to care about folding seats--when was the last time you even saw folding seats mentioned in any review, ever? They're going to care about the fact that it's a SUV that bests the McLaren on the drag strip to 60 mph.

 

[anticitizen13.7]

No other car will come close to matching MX cargo space. No other car will have a cavernous frunk available.

People are applying their own personal over-exaggerated needs of space, much like the countlessly empty pickup truck beds I see on a daily basis. Many people are thinking of the need to fold down seats on significantly smaller vehicles, or vehicles with only two seat rows and not three.

This is not a good argument because the issue is not so much the cargo volume, but the type of cargo that can be accommodated. In the various threads on this issue, I have seen photos of people hauling IKEA furniture, sports equipment, and even disassembled small airplanes in their Model S w' rear seats down. The Frunk doesn't help with long items.

Even if they don't fold flat in any configuration (highly doubtful standard seats won't, I can see why "rear executive" do not fold given how they differ in the Model S), there's just simply not enough people who haul plywood while also simultaneously not taking more than one passenger somewhere.

I simply see this as false outrage, and I don't think Tesla will be affected in the slightest. Even assuming there's no second row folding whatsoever, there are a ton of people who would love to have a performance car but right now are only limited to boring minivans and slow competitors. A big appeal of the Model S is that it is both a family sedan and a sports car on the weekends, and the same is now true of a Model X for bigger families. People will love it.

Not to echo earlier comments endlessly, but Tesla's specialty is incredible electric drivetrains and a car designed from the ground-up to be electric (enabling things like frunks). People buy Honda minivans for pure utility and folding seats. People buying a Tesla for any reason are going to have much different reasons for doing so, until we have an econo-model available.

And also to echo, any signature not certain about ordering sight unseen can defer, and then get a full and complete refund if not satisfied post-revealed. With a 27k and fast-growing waiting list, Tesla and TSLA will see zero realistic impact from "foldgate". Reviews aren't going to care about folding seats--when was the last time you even saw folding seats mentioned in any review, ever? They're going to care about the fact that it's a SUV that bests the McLaren on the drag strip to 60 mph.

First of all, this isn't "false outrage", because it is a real concern for some customers here on this forum. Being dismissive of people who actually have reservations down (and may also already be Model S owners) doesn't make the issue go away.

It is a fair point that with 27k+ reservations, Tesla may still be able to sell all the Model X vehicles they can build, at least in the short term. If the sales hold up and the financials aren't impacted, there won't be any negative effect on TSLA. However, limiting the appeal of Model X may not be the best idea for sales in the long run.

 

[Robert.Boston]

Moderator's Note

Just a friendly reminder -- this is the Investors Forum. Please use the MX threads to join into the general conversation about how often people haul plywood.

 

[JohnSnowNW]

However, limiting the appeal of Model X may not be the best idea for sales in the long run.

I believe there is a fable in this, though: "The Miller, His Son, and Their Ass"

You're not going to be able to build a vehicle that appeals to everyone, you have to pick and choose. It's pretty clear from the poll that it's a minority of people that require the 2nd row seat to fold flat. So, I'd say that if the 2nd row doesn't, Tesla has not made an error.

 

[anticitizen13.7]

I believe there is a fable in this, though: "The Miller, His Son, and Their Ass"

You're not going to be able to build a vehicle that appeals to everyone, you have to pick and choose. It's pretty clear from the poll that it's a minority of people that require the 2nd row seat to fold flat. So, I'd say that if the 2nd row doesn't, Tesla has not made an error.

I'd say "no error" if the 2nd row can somehow get out of the way, regardless of flat or not. Many crossovers don't have a perfectly flat load area. However, no way for the 2nd row to move would be an error in my judgment.

Look at all of the poll results.

About 30% require flat folding
Another 31% require "stow in some manner" (not necessarily flat, but out of the way)

The problem is that the information that Tesla Sales has conveyed leaves it ambiguous as to whether the second row can move out of the way. We know it doesn't fold flat, assuming that NASales is correct. The question is does it move out of the way somehow?

Model X is supposed to be a better SUV/CUV than Model S is a sedan. I believe Elon said that himself. Hauling large, bulky, and sometimes long items is part of what defines an SUV or CUV in my observation. I know people who own small crossovers like a CR-V, and medium crossovers like a Pilot or MDX, and large SUVs like Expedition. Without exception, people use these cars to haul big stuff: furniture, grilles, televisions, and much more. Having the potential to carry big stuff is an essential function for many buyers.

People should keep in mind that there's a risk that if the product doesn't match customer needs, it could impact meeting guidance. If initial volume is low enough that there are enough buyers in the pipeline who don't care about the 2nd row, the impact may be nonexistant at first.

 

[MikeL]

You're not going to be able to build a vehicle that appeals to everyone,. . . So, I'd say that if the 2nd row doesn't, Tesla has not made an error.

I'd say the opposite. Big mistake.
We'll see, I'm not making assumptions about the design I've never seen, but IF . . . I'll be disappointed, a lot. Maybe I'm in some sizable minority, but I don't think it's a small one.

 

[JohnSnowNW]

I'd say "no error" if the 2nd row can somehow get out of the way, regardless of flat or not. Many crossovers don't have a perfectly flat load area. However, no way for the 2nd row to move would be an error in my judgment.

That's true. In fairness I'm assuming that the 2nd row moves, or is removable. From the design studio images, if the seats don't move in some manner then I don't understand the ovular plastic base under each "pillar."

 

[Yggdrasill]

The seats probably minimally move forward until the base of the seat touches the front row, then tilts forward until the top of the seat back touches the front row. This means that probably, some of those who have voted that they require the seats to stow in some manner will be satisfied.

If we say half of that group would be satisfied, that's 43% of the people who have voted who would cancel. Counting only the ones who have actually voted, that's probably something like 3.9 million dollars in revenues and at least 215k USD in reservation payments that would walk out the door. If the 43% apply to the 27k reservations, that's 1 billion dollars in revenues and at least 58 million dollars in reservation payments.

I think 43% cancellation rate would definitely impact TSLA in the short term, even if Tesla could find new buyers and avoid becoming demand limited.

 

[callmesam]

Will Your Family Fit? | U.S. News Best Cars

Third Rows
Families of six or more have to shop carefully. There are only eight minivans on the market, and most three-row SUVs don’t have adult-size back seats. If you only need those extra seatbelts for occasional carpooling or passengers shorter than 5-feet, you have more wiggle room. Most reviewers say that minivans are your best bet if you frequently drive adults or teens, which may limit your choices further if you regularly carpool with coworkers or other grown-ups.

 

[sub]

I'm anxious for the Model X reveal so that these endless seat folding conversations will go away. I'll repeat myself, I have confidence that Tesla isn't run by a bunch of idiots until proven otherwise. Why would they create a utility vehicle and forget about the utility? Why would they create a utility vehicle that has less utility than their own sedan? Why would they show a photo and ask "what could you do with all this space?" then completely ignore that feature (the biggest reason to choose a CUV/SUV over a sedan)? None of that makes sense.

As for the poll, I think a lot of people will feign outrage or may be legitimately upset IF the 2nd row doesn't fold or stow out of the way. However, I prefer to give signature reservation holders more credit than to think they would walk away from buying a Tesla based on this one issue. I think once these people calm down they will remember what Tesla is all about and will continue to throw their financial support in the companies direction. I'm driving around a clown car right now (i3) because I want to get off of fossil fuels and I can't justify a Tesla yet due to the price and the low number of miles we drive as a family. I expect similar behavior from signature res holders. I believe there will be zero impact on the company short/long term based on a folding seat. I can't believe one person mentioned they sold stock over this issue. Get a grip.

I agree car reviews never mention seat configuration other than how many people can fit and how much leg room there is. However, we know that journalists read this forum so they will for sure pick up on the outrage and write about it. The good news is that the average person (specifically those not on TMC) will probably get nothing more than a chuckle out of the issue if they take notice at all.

 

[bonnie]

However, I prefer to give signature reservation holders more credit than to think they would walk away from buying a Tesla based on this one issue. I think once these people calm down they will remember what Tesla is all about and will continue to throw their financial support in the companies direction. I'm driving around a clown car right now (i3) because I want to get off of fossil fuels and I can't justify a Tesla yet due to the price and the low number of miles we drive as a family. I expect similar behavior from signature res holders.

Many of us are already driving a Tesla, have evangelized on behalf of the company, and are long-term stockholders - please don't lecture us as to what our support level should be.

 

[sub]

Many of us are already driving a Tesla, have evangelized on behalf of the company, and are long-term stockholders - please don't lecture us as to what our support level should be.

Not lecturing, simply stating my opinion on what I see happening.

I can see the headlines now "Tesla, once a great company on the path to changing the future until.....they omitted a 2nd row folding seat".

Yeah, probably not

I evangelize for the company (precisely what my post was doing by the way) and also a long term share holder as well.

No desire to pick a fight with a fellow Tesla supporter by the way. But really, do you honestly think that a sig res holder, the most evangelistic of Tesla believers is going to go pick up a gas guzzling, planet destroying SUV instead of a Model X because a 2nd row seat doesn't fold? If your answer is yes then I guess we will just have to disagree on this.

 

[bonnie]

Not lecturing, simply stating my opinion on what I see happening.

I can see the headlines now "Tesla, once a great company on the path to changing the future until.....they omitted a 2nd row folding seat".

Yeah, probably not

I evangelize for the company (precisely what my post was doing by the way) and also a long term share holder as well.

No desire to pick a fight with a fellow Tesla supporter by the way. But really, do you honestly think that a sig res holder, the most evangelistic of Tesla believers is going to go pick up a gas guzzling, planet destroying SUV instead of a Model X because a 2nd row seat doesn't fold? If your answer is yes then I guess we will just have to disagree on this.

Let's leave room for the fellow Tesla supporter who already uses an EV for 90%+ of their driving and also has a real need for the cargo space. Should they sell what they already have (in my case, a Jeep that I use occasionally) and go rent an ICE with adequate cargo space whenever needed? Why wouldn't I just leave that Jeep in the other side of my garage? You cannot dismiss those who actually had that flat space as shown as a requirement, just because it isn't important to you.

In any case, let's wait for the facts. But in the meantime, I acknowledge there are different user groups who have different needs. And I suspect Tesla will want people to buy a vehicle that they're happy with.

 

[Krugerrand]

No desire to pick a fight with a fellow Tesla supporter by the way. But really, do you honestly think that a sig res holder, the most evangelistic of Tesla believers is going to go pick up a gas guzzling, planet destroying SUV instead of a Model X because a 2nd row seat doesn't fold? If your answer is yes then I guess we will just have to disagree on this.

If the vehicle can not be used for an intended and needed purpose, then it would be reasonable for said person to not purchase said vehicle regardless of anything else. It's not logical to think people will pay large sums of money for something they can't use in a manner they need, even if they are in love with the company that makes it.

We've seen people here be upset about much smaller sums of money being spent: a few grand for AP that hasn't been implemented yet, a few more grand spent to gain a fraction of a second more in 0-60 time that they aren't able to realize. Heck, we've got people upset because they paid 100k+ for a vehicle without door pockets, enough cupholders/cupholders placed in more convenient locations, vanity mirrors, grab straps and a closed compartment big enough to stow a suitcase of personal possessions.

So, yeah. Even the most evangelistic of Tesla believers might consider a gaz guzzling, yadda, yadda, yadda instead of the X, if that X doesn't meet their personal day to day requirements. Or, said evangelist might wait for Tesla to provide a different option down the road that better suits the evangelist's needs.

Am I the only one that really dislikes the word evangelist?! Every time I read that word I think of Jim and Tammy Faye Baker and I want to puke. (and go wash my face - vigorously)

 

[bonnie]

Am I the only one that really dislikes the word evangelist?! Every time I read that word I think of Jim and Tammy Faye Baker and I want to puke. (and go wash my face - vigorously)

Don't forget the eyelash remover.

 

[aesculus]

Am I the only one that really dislikes the word evangelist?! Every time I read that word I think of Jim and Tammy Faye Baker and I want to puke. (and go wash my face - vigorously)

+1
Been catching up on Orphan Black. Lot of that there too.:scared:

 

[kenliles]

In any case, let's wait for the facts. But in the meantime, I acknowledge there are different user groups who have different needs. And I suspect Tesla will want people to buy a vehicle that they're happy with.

I'm holding out for the second row seat that folds into a first row center console...

 

[bonnie]

I'm holding out for the second row seat that folds into a first row center console...

I wish you much luck with that.

:tongue:

 

[Auzie]

I wanted to see like 3 more pages of Almc and Krugerrand discussing the pony. The meta is strong here.

I second this. Some entertaining read, pity the 'winner' is already settled.

you win

we have a winner

Perhaps AlMc might be back in the fight if we declare a draw.

 

[Auzie]

People trading for the short term need to be aware of this risk. If the X doesn't live up to expectations (in reservations turned into sales, as well as press critical acclaim) after a 2 year delay, TSLA will likely tank until a solution can be engineered and implemented.

Again this board is falling into the trap of thinking that product news (folding seats) is going to move the stock. How many D announcements do we have to go through before we learn that the stock makes sustained moves on financial news---not product news?

I just don`t see TSLA being impacted by this at all.

Positive product announcements (D release) did not impact the sp because the 'perfect quality' was priced in TSLA. At the time of D release, the sales or ability to sell was more in focus than the product quality, the car was good enough without the improvement.

Also, it might be easier to move the stock down than up.

If there is some disappointment with the product release, I would not be surprised with a minor correction. The correction might be blown out of proportion if there is some other, more relevant bad news happening at the same time (poor sales or similar).

I believe it will have an impact. I fold the seats in our S down all the time to haul things.

Without the option to fold the second seats how is one supposed to haul skis for a weekend ski trip? I don't have super fancy skis and there is no way I am putting them on a roof rack on our S to haul them. I fold down the split seat in our car.

IMO without the folding or removable seats and the larger towing capacity how can it be a Sport UTILITY Vehicle?

If I can't haul skis inside, pick up a couple of 2x4's for a weekend project or haul a new fridge home because mine died and the appliance store can't deliver it for a week, or pull my boat or camper to the lake then this is not a SUV. It's an oversized sedan.

I don't see a 25% cancelation rate but I do see an impact to the share price of it does not have these features. I also do not see how consumer reports can give it a 100 if it's missing those features.

Elon is building "perfect" cars. Missing these features is either an oversight or a compromise the engineers had to make.

These items will impact the short and medium term price.

+1. My bet is that the engineers must make many compromises under a tight deadline.

As these unavoidable choices/compromises are made, the pool of unhappy customers can only grow from here. It is just not possible to cater for many diverse people's wishes and desired features.

Such situation dictates the need for upfront communication about the product features before selling the product, to avoid unnecessary disproportionate disappointment due to 'missing' features on the world best car ever.

It is my impression that the most of the disappointment comes from the feeling of 'being cheated' rather than from really missing out on car hp, non-folding seats or acceleration that 'does not measure up' to Mc Laren non-measured performance.

Customers can not feel cheated if they make a conscious decision and a known choice. The feeling of being cheated comes from the choice being taken away from them.

Most people would still buy the same car but would not feel cheated if they had the upfront knowledge of 'missing hp/fractions of second/not folding seats/you name it'.

Going forward, Tesla will learn to manage customers expectations with water tight purchase contracts that allow for product uncertainty/ambiguity if they wish to continue taking orders for their products before the products are fully developed, tested and communicated about.

Such preannounced product uncertainty/ambiguity must be explicit and prominent to be effective in weeding out future dissatisfaction and vocal complaints.

You are absolutely correct that guessing does nothing about advancing our knowledge about the X. Problem: You can't make an informed decision about configuring your vehicle without having all the facts.

I know this really is a 'first world' problem and I am lucky to be in a position to even contemplate spending this type of money on a vehicle but TM has had a history of not being forthcoming/informative with their customer's questions.

Perhaps that was unavoidable communication (missing) strategy during the business rapid growth. As the business matures, they will learn what sort of communication makes the least damage. I would expect upfront communication about the product features to be part of a more mature business.

In the meantime, perhaps CPO market may be a better place for some customers that are unwilling to risk/bear product uncertainty.