With new SUV Model X, Tesla aims for the family market – at a price

On Tuesday night, the electric car maker unveiled its newest model, which is focused on the growing market for luxury SUVs. But the car's increased price tag and slightly reduced battery power may limit its appeal slightly.

Marcio Jose Sanchez/AP
Elon Musk, CEO of Tesla Motors Inc., introduces the Model X car at the company's headquarters Tuesday, in Fremont, Calif.

On Tuesday night, electric car maker Tesla Motors unveiled its new Model X, a long-anticipated luxury sport utility vehicle the company hopes will broaden its audience to include families with children.

With features, such as falcon-wing-style rear doors that open upward and a front door that opens automatically and closes once the driver is inside, it’s clear Tesla hasn’t abandoned the signature sporty styling visible on its other two models, a sedan and a two-seater.

Tesla head Elon Musk said the car’s signature features represent a new high for automotive engineering, adding that they had been challenging to manufacture and created delays in the car’s launch, which was originally set for 2012 before being expected last year.

The new Model X seats seven people in three rows, with the Associated Press reporting that during a test drive, the back row could fit an adult with “a surprising amount of headroom.” The car’s windshield, which sweeps back and over the front seats, is the biggest in the industry, the company says. It also features a 17-inch touch screen, with navigation, music, and cabin controls.

The company "got a little carried away,” designing the Model X, Mr. Musk said on Tuesday, and might have made some changes if it had known about the difficulty of manufacturing some of the car’s features.

"I'm not sure anyone should make this car," he added, according to the AP. "There's far more there than is really necessary to sell the car."

But doing exactly that is likely to be somewhat of a challenge.

The market for luxury SUVs is growing rapidly, increasing 17 percent as of August. However, Tesla vehicles remained priced for a limited audience, with a basic Model X costing around $93,000, or $5,000 more than an equivalent Model S sedan, according to Musk.

Exact pricing for the basic model hasn’t been released, but the fully-loaded SUV would cost $142,000, though there is currently a $7,500 tax credit for electric vehicles.

After the company discontinued its Roadster model in 2012, leaving only the Model S sedan, some analysts began wondering about the future of the electric-only car manufacturer. Offering an SUV model – especially as the Model X would be only the few all-electric larger vehicles on the market – poses a potential solution.

“If Tesla's going to be a more significant player, they need more products, and SUVs are what the market is demanding," Michelle Krebs, a senior analyst with the car buying site AutoTrader.com told AP. Musk has said Tesla expects about half of its sales to be SUVs.

Despite the advances of the doors, for environmentally-savvy families interested in an electric SUV, the Model X may have some drawbacks. The Model X is built on a platform and motor shared with the company’s sedan Model S, but instead of multiple battery-capacity options, it has only a 90 kilowatt-hour battery and comes with all-wheel-drive.

This reduces its eco-friendliness somewhat, as Stephen Edelstein of GreenCarReports wrote recently:

“The Model S P90D is rated at 270 miles of range and 100 MPGe combined (95 MPGe city, 106 MPGe highway), while the Model S P90D is rated at 253 miles and 93 MPGe combined (89 MPGe city, 98 MPGe highway).”

Tesla says it has received 25,000 orders for the Model X, delivering the first six SUVs on Tuesday. The company’s next car, the lower-priced Model 3, is due to launch in 2017 in order to fulfill the company’s goal of selling 500,000 vehicles by 2020.

This report contains material from the Associated Press.

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