Tesla sales pace falls short at end of 2015

Tesla CEO Elon Musk speaks at the Model X launch event in Femont, California on September 29, 2015. AFP PHOTO/SUSANA BATES

Tesla CEO Elon Musk speaks at the Model X launch

Tesla Motors delivered only 208 of its new Model X crossover sport utility vehicle in the final quarter of 2015 as it raced to expand the car’s production, according to figures released by the company on Sunday.

The pace of the production ramp-up for the X left the company short of its hoped-for overall sales target in the period. Total deliveries for the quarter reached 17,400, at the low end of its 17,000-19,000 guidance range.

However, the California-based electric carmaker said on Sunday that its production ramp-up for the vehicle “has been increasing exponentially”, with the daily production rate reaching an equivalent of 238 per week in the final days of the year. It also said the number of Model X’s produced in the quarter, at 507, showed that “we prioritise quality above all else” in the very early stages of production.

Tesla’s Q4 deliveries were highly anticipated by Wall Street, given the importance of a successful Model X lift to the company’s 2016 performance, and given the production and delivery glitches that had dented its Q4 performance in 2014.

The X was launched at the end of September and is built on the same platform as the other vehicle Tesla has in production, the S sedan. However, its doors lift vertically and this and other features, such as an extra row of seats, have added to production complexity.

The company warned at the time of its announcements of third-quarter earnings that component shortages were the most serious potential production bottleneck. Tesla itself took over production of some seat components from its suppliers to ease the problem.

The Q4 delivery shortfall left Tesla with 50,580 deliveries for 2015 as a whole, in the lower half of the 50,000-52,000 range it had predicted. It had already cut its forecast back from the previous 55,000 as it geared up over the summer to produce the X.

Elon Musk, chief executive officer, has repeatedly said the pace of the production rise for the X would be determined by the company’s ability to reach its quality goals.

Tesla said its vehicle delivery count for the fourth quarter might change slightly when it reports earnings for the period, expected in early February.

 

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