Tesla Q4 Exceeds Annual Production Goal, Misses Delivery Target
The Tesla Q4 numbers were a case of good news, bad news. The company announced in a press release on Tuesday that it “produced 24,882 vehicles in Q4, resulting in total 2016 production of 83,922 vehicles. This was an increase of 64% from 2015.” In its earnings call with analysts in November, it said to expect annual production to come in at around 80,000 vehicles, so it exceeded that target by a comfortable margin. At the beginning of 2016, Tesla said it expected to deliver 90,000 cars for the year but later lowered that guidance to 79,000 due to difficulties encountered with getting the Model X into full production.
Tesla says it delivered “about 22,000” cars in the fourth quarter — 12,700 Model S sedans and 9,500 Model X SUVs. Both Tesla Q4 production and deliveries were affected by the changeover from first generation Autopilot hardware to the second generation hardware. Normally Tesla simply introduces production upgrades on the fly but the complexity of the changeover from one hardware package to the other required shutting down the production lines for about a week and a half during the quarter. Considering how long production was suspended, the company did well to build as many cars as it did.
Most of the production for the quarter was concentrated in the last 6 weeks. That meant a large number of finished cars were in transit when the quarter ended — 6,450 vehicles. Tesla says “these [vehicles] will be counted as deliveries in Q1 2017.” It said in a statement, “although we tried to recover these deliveries and expedite others by the end of the quarter, time ran out before we could deliver all customer cars. In total, about 2,750 vehicles missed being counted as deliveries in Q4 either due to last-minute delays in transport or because the customer was unable to physically take delivery. Even where these customers had already fully paid for their vehicle, we still did not count these as deliveries in Q4.”
The Tesla Q4 news sent a small ripple through the company’s share price but investors had already anticipated a good but not spectacular quarter. The company now is focusing on maintaining deliveries while it gets ready for production of the Model 3 midsize sedan later this year. Tesla remains one of the most shorted stocks on the New York Stock Exchange, indicating there are lots of people who think Elon Musk will not be able to keep all the balls he is juggling in the air indefinitely. It should be a very interesting year for the upstart maker of exceptional electric automobiles.