Tesla Motors shares took a hit on Wednesday after Morgan Stanley cut its forecast on Model X deliveries.
Analyst Adam Jonas said that he now sees Elon Musk's luxury electric car company delivering 5,000 Model X vehicles next year, well below an earlier estimate for 15,000 vehicles.
"Our forecasts apply what we believe to be reasonable execution risk on this important model to ensure uncompromising quality of initial units," Jonas wrote in a note to clients, according to IBN.com
Company shares dropped 2.7 percent to 250.73 shortly after the news was announced. Shares were down 3 percent to about $249 Wednesday afternoon.
Forecasts on Model X deliveries were hurt due to supposed issues with the double hinges on the "falcon" doors. Traditional doors use only one hinge.
There also might be an issue with the larger size of the door for the crossover vehicle, according to IBN.com.
Tesla CEO Elon Musk took to Twitter to address plans of scrapping the falcon doors.
Rumors about canceling Falcon wing doors are false. At Tesla, the production car will always be better than the show car.
— Elon Musk (@elonmusk) November 19, 2014
This week, Jonas lowered his full year earnings estimate to 73 cents per share compared to an earlier outlook of $1.13. The Thomson Reuters estimate is currently at 61 cents. Jonas wrote that he sees a 2015 EPS of $2.45, a big drop off from the previous estimate of $4.39.
"We believe the Model X is critical to the Tesla story and execution on this product is critical. There is a lot about the Model X which may be easier to execute upon vs. the Model S given high levels of commonality and experience with the factory," Jonas said in his report. "However, there are still some unique attributes to the vehicle that could present a near-term challenge. 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."
A few weeks ago, Tesla said the company was pushing back the launch of the Model X by a couple months in order to do conduct more testing. The automaker now plans on delivering the new SUV-style vehicle sometime during the third quarter of 2015.
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