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Morgan Stanley On Tesla's Doors & The Model X Launch Delay

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On Monday, analysts at Morgan Stanley commented on Tesla Motors Inc (NASDAQ: TSLA).

Given that Tesla has further delayed the launch of the Model X, Adam Jones believes Tesla may be having difficulty with its double hinged doors.

Jones wrote, "While the blogs have been full of rumors about potential difficulties with executing the doors in mass production, we have heard nothing specific to confirm that the doors area particular root cause of the production delay. We are nonetheless asking ourselves the question: If the doors were presenting a significant engineering challenge, what are Tesla's options and how much of a problem could this be?"

Jones feels that if Tesla plans to keep the "falcon doors" they may risk further delaying the release of the Model X.

On the other hand, if they "ditch the doors" Jones finds then Tesla would have to undergo a substantial redesign/re-engineering of the aluminum body from the B pillar back to make the transition.

Jones believes Tesla will not cancel the Falcon doors without significant effort to save them.

"If door execution were to prove very challenging, we would expect Tesla to make every effort to preserve them with as much of the primary functionality as originally conceived, even at a potentially higher expense to the company or a higher end-price to the consumer. This may seem superficial, but we see the doors as an extremely important selling point for the Model X – one that we believe ranked very highly in the minds of Tesla engineers and consumers."

Shares of Tesla closed Monday at $253.98, down 1.82 percent.

Latest Ratings for TSLA

DateFirmActionFromTo
Oct 2019DowngradesMarket OutperformMarket Perform
Sep 2019Initiates Coverage OnBuy
Jul 2019ReiteratesUnderweight

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