Getty Images
Tesla CEO Elon Musk.
Tesla CEO Elon Musk.
Tesla CEO Elon Musk.
Tesla CEO Elon Musk.
Tesla CEO Elon Musk.

Tesla Quarterly Sales Miss as 'Hubris' Hurts SUV Supply

April 4, 2016
CEO Elon Musk blamed the delivery count on parts shortages and adding too much technology to the Model X too soon.

Tesla Motors Inc. shipped 14,820 vehicles in the first quarter, less than the 16,000 it had forecast in February. Tesla’s shares fell in after-market trading, giving back some of the gains that followed surprisingly strong orders for the company’s new, less-expensive electric car.

Tesla blamed the delivery count on parts shortages for the Model X sport utility vehicle and “hubris in adding far too much technology to the Model X in version 1,” the company said in a statement Monday, in which it reaffirmed plans to deliver 80,000 to 90,000 vehicles this year. The first-quarter deliveries, up 48% from a year earlier, included 2,400 units of the Model X, which became available in September.

You have a first-quarter “miss in the middle of reservations for the Model 3 going through the roof,” said Andrea James, an analyst at Dougherty & Co. who has a buy rating on the stock. “Execution matters on an execution story, but Tesla scores points for their honesty about what happened in the quarter.”

Combined deliveries of Tesla’s first three electric vehicles -- the Model S luxury car, the Model X and an original Roadster that’s now discontinued -- are now roughly 122,000, less than half of the more than 276,000 orders received just since Thursday for the company’s newly introduced Model 3. That electric car’s $35,000 price tag adheres to Chief Executive Officer Elon Musk’s strategy of introducing a more affordable, high-volume vehicle only after he had succeeded with more expensive models.

“Roadster, S and X customers are the ones who got us here and are paying for 3,” Musk said in a tweet over the weekend. “They deserve a lot of credit.”

Shares Retreat

Tesla shares fell 2% to $241.99 at 4:49 p.m. New York time, after regular trading. Tesla had gained 4% to close at $246.99 after reaching a six-month high earlier on Monday, before the deliveries were announced.

Though the Model 3 isn’t expected to begin production until late 2017, the orders that have already been placed--each requiring $1,000 to reserve--have given Tesla a cash infusion of at least $276 million. The company raised $226 million in its June 2010 initial public offering.

Tesla releases global sales figures quarterly, instead of the monthly country-by-country results typically announced by other automakers. The maker of electric cars and energy storage devices delivered 50,658 Model S sedans and Model X sport utility vehicles in 2015, toward the low end of its revised target to ship at least 50,000.

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

Adopting an Open Ecosystem: The Way Forward for Frontline Operations

March 11, 2024
Today's manufacturing tech stack thrives on connectivity, integrating new and legacy players for a seamless operation - not on monolithic systems. Embrace the future of frontline...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!