Tesla CEO Elon Musk has admitted the Model S sedan and Model X SUV are “niche” vehicles that are “really of minor importance to the future” in the third quarter 2019 investor call.
Tesla’s strategy of democratising electric vehicles (EVs) has always centred on introducing high-end luxurious and desirable models such as the Model S and Roadster before the more affordable fare such as the Model 3.
And it appears that turning point for the brand could be coming sooner rather than later.
When asked about the future strategy for Model S and Model X, of which sales have remained flat this year due to the increased interest in the Model 3, Mr Musk said “we’re continuing to make them more for sentimental reasons than anything else”.
“I think if you’re out there an you’re buying – and you’re going to buy a Model S, I think you just made a mistake, to be totally frank.
“Model S, I think, is like Faberge eggs of cars … Model X is like the Faberge egg of cars. Yeah, that’s why so many artists and musicians buy the car. It’s an art piece basically.”
Stepping in, Telsa chief financial officer Zachary Kirkhorn said now that Model 3 production has hit a sustainable cadence, the brand would put efforts in place to refocus on S and X.
“They’re absolutely phenomenal cars, and we are increasing production on our S and X lines for this quarter in response to increasing demand,” he said.
“And so, I think part of the story here is, as we have launched, ramped and stabilised Model 3, that’s kind of consumed a lot of the attention around the company.
“But now as that has stabilised, we’re able to focus our attention and balance that between S and X and Model 3. So, the delivery numbers in Q3 understated the interest in the product for that quarter.”
For the third quarter of the year, Tesla production hit 97,000 units, while deliveries worldwide reach around 96,000.
Tesla is also in the final stages of opening a Gigafactory in Shanghai, which will focus on producing the popular Model 3 for the Chinese market and has capacity to pump out 150,000 units annually.
The existing Freemont facility meanwhile, can deliver 90,000 combined units of the Model S and Model X, and 350,000 Model 3s per year.
However, the US facility will also be tooled up to build the Model Y – a mid-size SUV to slot in below the larger Model X – that will start rolling off the line from around the middle of next year.
Tesla is also on the look out for a suitable site in Europe to build its Model 3 and Model Y.
Another anticipated new model release from the EV brand is its all-electric pick-up, which Mr Musk called the “Tesla Cyber Truck”.
When pressed on more details of the ute, he responded: “I think we’ve said enough about the Tesla Cyber Truck.
“We’re not going to – this is not the right forum for us to do product launches.
“I could be totally out to lunch here, but I think the Tesla Cyber Truck is our best product ever. That’s my opinion.”
No mention of the new Roadster revealed two years ago was made.