Tesla Motors announced on Sunday the vehicle production and deliveries for Q2 with controversial numbers.
Not all is smooth sailing these days at Tesla Motors. Last week the news about an avid Tesla fan dying in a car crash while on auto pilot rattled the Tesla fans. On Sunday Tesla Motors published the vehicle production and deliveries numbers for the second quarter of 2016.
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Tesla (NASDAQ: TSLA) produced 18,345 vehicles in Q2, an increase of 20% from Q1, and exited the quarter consistently producing just under 2,000 vehicles per week. Due to the steep production ramp, almost half of the quarter's production occurred in the final four weeks.
With continued productivity improvements, Tesla expects output to reach 2,200 vehicles per week in Q3 and 2,400 vehicles per week in Q4.
Current order rate trends and backlog support production at those levels. In total, Tesla expects to produce and deliver about 50,000 vehicles during the second half of 2016, approximately equal to all of 2015.
While the production numbers sound good, the delivery numbers are lower than predicted due to a weird reason according to Tesla.
Due to the extreme production ramp in Q2 and the high mix of customer-ordered vehicles still on trucks and ships at the end of the quarter, Tesla Q2 deliveries were lower than anticipated at 14,370 vehicles, consisting of 9,745 Model S and 4,625 Model X.
In total, 5,150 customer-ordered vehicles were still in transit at the end of the quarter and will be delivered in early Q3. That amount was higher than expected (there were 2,615 vehicles in transit to customers at the end of Q1) and is more than a third of the number of cars that completed delivery in Q2.
It is not quite clear how over 5,000 cars can be in transit. Tesla makes 2,000 cars per week. This means thousands of cars are in transit for at least three weeks. It could be that all of these go to China.
The Model S facelift should actually trigger a sales up tick. In parallel Tesla is preparing to manufacture the Model 3. Tesla's for cast of making 2,400 cars per week in Q3 is still just foreplay. Tesla sits on about 350,000 pre-orders for the Model 3. Elon Musk's electric car company plans to start production of the Model 3 in 2017 and ship the first Model 3 to customers in late 2017.
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Weekly productions need to skyrocket in 2017 to work off the pre-orders.