Tuesday, July 5, 2016

Tesla Misses Q2 Delivery Target But Increases Production

Officially, Tesla had a not so good second quarter. It delivered only 14,370 vehicles between April 1 and June 30 — half of them in the last 4 weeks of the quarter. Of the total 9,745 were Model S sedans and 4,625 were Model X SUVs. It had projected nearly 20,000 deliveries for the quarter. Production was actually up 20% over Q1, but the company had an unusually high number of vehicles in transit when the quarter closed — 5,150. That compares to only 2,615 cars in transit at the end of Q1. Tesla expects those cars in transit to be delivered early it the third quarter.
tesla model X in China
These seats are taken, says Tesla in China
Spokeswoman Khobi Brooklyn says that output is expected to reach 2,200 vehicles per week in Q3 and 2,400 vehicles per week in Q4. In all, the company plans to deliver 50,000 cars between now and the end of the year. That’s as many in 6 months as it did in all of 2015. Hitting that target will be difficult. With combined deliveries for Q1 and Q2 of 16,000 and 14,300 cars respectively, that means Tesla will need to deliver an average of 25,000 vehicles in Q3 and Q4 to reach the bottom of its predicted production range for 2016.
Getting accurate information from Tesla Motors about how many cars it delivered in a quarter in various markets around the world is always difficult. But Daniel Sparks at The Motley Fool has some insights he has gleaned from various sources. He says that at least a few Model X vehicles were delivered in Canada, Europe, and China before the end of June.
According to Sparks, Model X deliveries began in Canada near the end of May. In late June, a truckload of them were spotted near the Tesla final assembly factory in Tilburg, Netherlands, based on a report from Electrek. In China on June 29, Tesla posted a photo of a row of Model X cars with their falcon wing doors all open on social media. The caption read, “These seats are taken.”
Delivering cars to customers in other countries is a sign that Tesla has finally gotten a handle on the production gremlins that have plagued the introduction of the Model X. Deliveries of the SUV are critical to meeting its production targets for the year and for calming investors fears that the company cannot meet its ambitious goal of delivering 500,000 cars a year by 2018.
Tesla stock will probably begin the trading week lower because of its missed Q2 performance, but the continued increase in production should be good news for anyone who is paying attention to the long term prospects for the company rather than day trading based on the latest rumor and innuendo. Tesla is always a little behind its own self congratulating hype, but it still has an impressive record for a start-up that didn’t begin making automobiles until 4 years ago.
Patience, grasshopper.

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