Tesla is gearing up to produce its next model.

The company has halted production as its assembly plant in California for the first time in order to retool and get ready to produce its upcoming Model X crossover. In addition, the revamp will help speed up Model S output. Production at the plant will resume August 4, with a goal of boosting Model S production by 25 percent.

Upgrades to the plant include modifications to the factory’s body and general assembly lines and will cost about $100 million, according to Tesla spokesman Simon Sproule. Earlier this year, Tesla CEO Elon Musk proclaimed that he wants the American automaker to deliver 35,000 Model S to customers in 2014, about a 56-percent increase compared to 2013.

Will offer a third row seat

The Tesla Model X was originally slated to be launched in 2013 but that date has been pushed back as the company focused on repaying their government loans and ramping up production of the Model S. Thankfully, the delays appear to be over as the company has confirmed the model will go into production early next year.

In an e-mail to customers who have already reserved the model, the company said the crossover "will be a production car that exceeds the promises made when we first showed the concept." The e-mail goes on to say the first prototypes will be built this fall and the production model is slated to roll of the assembly line in early 2015.

The message went on to state the production model will come standard with all-wheel drive and "deliver a level of functionality and practicality that will exceed what you saw on the concept vehicle." A third-row seat will also be optional and the model is slated to keep the concept's distinctive "falcon wing" doors.

For a car that has only been seen a handful of times in public, demand and expectations for the Tesla Model X are at an all time high. But don’t blame Tesla; as Business Insider reports, the company is actively trying to get would-be Model X buyers into the Model S instead. Why would Elon Musk do that?

On the record, Musk said that the reason he doesn’t want to build demand for the upcoming Model X is that customers were “upset” at waiting too long, going so far as to make a public spectacle of themselves. The Tesla CEO wants to avoid another such public car bashing over delayed deliveries.

Another reason for the lack of Model X hype is that Musk already has about a year’s worth of production in reservations. At last tally, there were more than 12,000 Tesla Model X reservations, and that number has grown everyday despite the fact that there are no test drives and little information available on the electric SUV. Tesla-mania is at an all-time high, and Musk brazenly claims he can create demand for his product “at will.”

To his credit, Musk has built an incredible electric car brand without investing a single dollar into marketing or advertising, but Musk has also delayed production of the Model X at least once. While the retooling of the Fremont plant is underway, there have lately been questions about Tesla’s drivetrain reliability. Hopefully these issues have been ironed out in time for the Model X rollout.

If not? Well the hype train might just come to a screeching halt.

Tesla's Model X SUV is one of the most anticipated cars on Earth right now.
It's due to arrive in 2015, and Tesla recently retooled its assembly line in Fremont, Calif. to be able to build it.

Customer interest is high. But that doesn't mean Tesla is trying to satisfy it.

During Tesla's second-quarter earnings call on Thursday, CEO Elon Musk told JPMorgan's Ryan Brinkman that the company actually steers buyers away from the Model X (this is from the Seeking Alpha transcript):

There are no cars available for a test drive. There is no information about the cars in our stores because we're only selling the [Model] S. In fact, if somebody comes in who wants to buy the X, we try to convince them to buy the S. So we anti-sell it.

Obviously, it's great for Tesla if it can sell another Model S, a car that starts at $70,000 (before federal and state tax incentives). And the company is taking $5,000 reservations for the Model X. But it's fascinating that the automaker isn't really trying to preemptively generate big demand for its falcon-winged SUV-minivan mashup. As Musk told Goldman Sach's Patrick Archambault:

We can drive demand up at will. But if drive it up too much, then people would get upset with us because they waited too long for their car....[W]hen I was visiting in China, the only unhappiness I saw was...because customers were upset about waiting too long for their car. So it's like, boy, we better not stoke demand in that situation.

Anti-sell and avoid stoking demand — it's a remarkable way to run a car company.

Tesla said last week that it will test the alpha and beta prototypes of the vehicle in the next few days

Many have called Tesla Motors Inc (TSLA_) a one-hit wonder. But soon their perception is going to change. Morgan Stanley analyst Adam Jonas believes that the forthcoming Model X is all set to feast on the premium SUV market. Jonas said the SUV crossover has the potential to be far more successful than the Model S. Morgan Stanley has an Overweight rating on Tesla with $320 price target.

Model X to win every major Car of the Year award from automotive media

Tesla has already received more than 15,000 pre-orders for the Model X. The company aims to sell at least 50,000 units of its upcoming model in 2015. The San Francisco-based company is in formative stages of its development. So, the success of each model would significantly change the investor and consumer perception of commercial and engineering capabilities of the company.

Jonas said he would be disappointed if Model X didn’t win “every major Car of the Year award” next year. Tesla designed the award-winning Model S even when the company had little financial and technical resources at its disposal. The company is spending two times more on R&D and four times more on capex the year before the Model X launch compared to the year before the Model S launch.

What will be the USP of Model X?

Morgan Stanley expects the Model X starting price to be 5%-10% higher than the Model S. But the crossover will have far greater features and equipment, so the price would seem more favorable to the customer. Unlike Model S, the upcoming vehicle won’t sell on fuel-saving economics. Instead, Morgan Stanley expects its USP to be cool features such as falcon doors, upgraded infotainment system, interior comfort; and driving pleasure such as all-wheel drive, acceleration and handling.

Model X is expected to be launched in early 2015. The alpha and beta prototypes of the vehicle are yet to be tested. Tesla announced last week that the company will test those prototypes would be tested in the next few days. Adam Jonas estimates that the Model X sales could easily surpass Model S by the end of 2016. Global SUV/crossover market is significantly larger especially in the U.S. and China, so Model X is likely to capitalize on the popularity of SUVs.

The post Tesla Motors Inc Model X To Be Far More Successful Than Model S appeared first on ValueWalk.

The Tesla Model X will storm the crossover market when it arrives in 2015, demolishing the luxe SUVs offered by the unsuspecting big car companies in a wave of EV awesomeness. This prediction comes to you not from Elon Musk fanboys or Tesla devotees, but from the buttoned-down folks at the financial giant Morgan Stanley.

The firm's analysts, trying to predict the future of the automotive market, are about as high on Tesla Motors as you can be. The company's stock is their "top pick in U.S. autos," according to the L.A Times, and will "sweep every Car of the Year award on offer by the automotive media." Morgan Stanley predicts Tesla's stock price to rise from its current $250 to $320 by the middle of next year.

What's with enthusiasm for a long-delayed car that nobody's actually driven? Morgan is extrapolating from the passion and insatiable demand that Tesla was able to generate with the S sedan, which won numerous car of the year awards. This time around, the firm says, Tesla should be in a position to do even better: It has more money to invest in the X and more time to work out the kinks before launch.

As for me, I'm still holding out for the Model III.

To conduct additional testing before release

Tesla Motors has announced the Model X has been delayed until the third quarter of 2015.

Initially, the Model X was supposed to go on sale late 2013 but then it was postponed until late 2014 after Tesla disclosed plans to pay back earlier than planned the $465 million loan from the U.S. Energy Department. Last time we heard the electric all-wheel drive SUV was slated to enter production phase early 2015 but now it has been pushed back yet again until the third quarter of next year when deliveries are expected to commence.

The announcement was made through a shareholder letter sent this week and the decision was motivated by a "longer than expected" process of getting the Freemont factory ready as well as by the additional time necessary for Model X testing procedures. Tesla mentions they are currently testing Alpha prototypes and initial builds of Beta prototypes while the powertrain development is almost done.