Tesla’s New Doors Expected To cause sales Forecast Miss

Tesla Expected To Miss Sales Forecasts Because Of Its Weird New Doors

Tesla’s ongoing upward sales trends may have shut the door on critics of electric autos, but opening the doors on its newest Model X could hold sales forecasts back next year.

Analyst for Morgan Stanley Adam Jonas predicted Wednesday that the Silicon Valley startup will only sell a third of the Model Xs initially predicted next year, influencing a share drop of nearly 4 percent in Tesla trading for the day.

“We have adopted our Model X forecasts not only for a 3Q launch (which we expect to be late 3Q), but also for a slow ramp once deliveries begin,” Jonas said according to Barron’s. ”Our forecasts apply what we believe to be reasonable execution risk on this important model to ensure uncompromising quality of initial units. We recently raised a question about whether a seemingly mundane attribute of the car, the falcon doors, could prove to be a technical challenge at scale.”

The prediction follows Tesla’s third delay of its third production-line model and first SUV — the Model X, which reservation customers have been waiting on since 2012, and will not hit streets until the latter half of 2015.

“We prefer to forgo revenue, rather than bring a product to market that does not delight customers,” Tesla CEO Elon Musk said in a third-quarter letter to shareholders.

Jonas revised sales of the Model X down from 15,000 units to 5,000 and reduced earnings from $2.99 to $2.45, but maintained his price target of $320.

In his explanation of the revision, Jonas seemed to echo Musk’s sentiments that pushing back deadlines for a more fine-tuned product would pay off in the long term for Tesla, which swept up and set records for almost every consumer award with its leading Model S in 2013 after delaying the car for a year.

“We would look for any hiccups/delays as an opportunity to increase exposure to what we believe is the most important manufacturer in global autos,” Jonas said.

Tesla beat analysts’ earning expectations for the third quarter this year and doubled revenue to $852 million for the period, selling a record 7,785 Model S units.