Here's Why the Model X Will Be Bigger Than the Model S

Updated from 11:13 a.m. to include thoughts from Morgan Stanley analyst in the fourth paragraph.

NEW YORK (TheStreet) -- Tesla Motors (TSLA) future lies in its ability to meet demand for the Model S, the Model X and ultimately what comes after it. If Elon Musk has his way, the Model X will be bigger than the Model S.

In Tesla's shareholder letter, the company noted it expects "to have production design Model X prototypes on the road by end of year and begin volume deliveries to customers in the spring of 2015."

During the conference call, Musk noted that while Tesla has done no advertising for the Model X, reservations for the upcoming sports-utility-vehicle have been staggering, equating it to like fish jumping in the boat.

Morgan Stanley analyst Adam Jonas noted it was surprising how strong the reservation balance Tesla provided was, due largely to the Model X. "We agree with Tesla management that demand for the Model X could materially surpass that of the Model S," Jonas wrote in a note. The surprisingly strong $160m reservation balance was driven in large part by pre orders for the X."

An early view of the Model X prototype.

"I think the biggest thing we can attribute that sort of growth to is that the Model X demand is very high," Musk said on the call. "But there's a number -- obviously, we don't disclose it, but even though there's 0 marketing for the Model X -- essentially, it's like if you're going fishing, it's like the fish are jumping in the boat. We're not actually trying to sell the Model X at all, but demand seems to be remarkably high. And we're seeing a steady accumulation of Model X deposits."

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