Tesla Sales On Target, Gigafactory Groundbreaking Next Month: FINAL UPDATE Page 2

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Tesla Store opening in Westfield Mall, London, Oct 2013

Tesla Store opening in Westfield Mall, London, Oct 2013

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Musk also noted that Tesla had said it expected to build cars in China in three or four years, especially once its current Fremont, California, plant had reached its maximum production.

"Our biggest issue in China with unhappiness is that customers aren't getting their cars soon enough," he concluded, with wait times of four to five months, especially in mid-size cities where Tesla had not yet opened facilities.

MORE: Good Luck In Getting Tesla Owners To 'Give Back' Electric Cars! (Hilarious Paranoia Alert)

"We didn't do as good a job as we should have done in some of our prior market launches," Musk said, and it had learned from that lesson.

That said, speed is of the essence in China. "My instructions to the team in China are to spend money as fast as they can without wasting it," Musk said, to roll out Tesla Stores and service centers as rapidly as possible.

One analyst said he'd talked to several Chinese customers who'd placed orders for Model S cars and then canceled them because the wiring in their buildings wasn't capable of supporting a Tesla electric-car charging station.

Musk responded that the company is not seeing a lot of cancellations, but also noted that Tesla was planning to install Supercharger locations in central cities as well as on highways--unlike North America.

And, CTO JB Straubel added, the company's experience in China had been that much of the wiring in many new Chinese buildings was actually quite up-to-date and capable.

Tesla Model X prototype in Culver City, California [photo by Instagram user jmtibs]

Tesla Model X prototype in Culver City, California [photo by Instagram user jmtibs]

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Model X on the way

Tesla said in its letter that it expects to have "production-design prototypes" of its Model X crossover utility vehicle ready in the fourth quarter of this year.

Once they're ready, the company needs a period of validation testing to make sure the cars are properly validated for all climates and road types--because, Musk said, the production ramp-up for the Model X will be far quicker and steeper than it was in late 2012 for the Model S.

That means that production ramp-up won't start until "Spring 2015" in the words of the shareholder letter--although no Tesla executives gave more precise timing on the call.

"There's no question that we are delayed on the Model X," Musk said, saying that wasn't "new news." The company had to spend more time than it planned updating the Model S, which he said is now "in good shape."

Musk promised that the Model X would not be introduced until every detail was just right--and that the company's goal was to make a production car that was even better and more impressive

One example, he said, was getting the seal on the Model X "falcon door" to work just right, stay watertight, reduce road noise, last for many years, and not be too visible.

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