Tesla 2Q Vehicle Deliveries Miss Expectations Due to Extreme Production Ramp

Tesla century city

Tesla Motors Inc (NASDAQ:TSLA) disclosed that it delivered 14,370 vehicles including 9,745 Model S and 4,625 Model X in the second quarter of this year. The electric car manufacturer missed its delivery forecast of 17,000 units.

The extreme production ramp and high-mixed of customer-ordered vehicles still on trucks and ships by the end of the quarter were the primary reasons for its lower-than-expected vehicle deliveries.

According to Tesla, a total of 5,150 customer-ordered deliveries are still in transit at the end of second quarter, higher compared to the 2,615 in transit vehicles recorded at the end of the first quarter.  The electric car manufacturer expected those in transit vehicles be delivered early in the third quarter.

Tesla vehicle production rose 20% in Q2

Tesla reported that its vehicle production increased 20% to 18,345 per share in the second quarter. According to the company, it is consistently producing less than 2,000 vehicles per week by.

The electric car manufacturer said, “Due to the steep production ramp, almost half of the quarter’s production occurred in the final four weeks.”

Tesla is expecting its production to reach 2,200 vehicle per week in the third quarter and 2,400 units per in the fourth quarter. Currently, order rate trends and backlog support production are at those levels.

Overall, the company is expecting to produce and deliver around 50,000 electric cars during the second half of 2016.

Tesla is accelerating its production at its factory in Fremont, California and its target is to produce 500,000 vehicles by 2018. Experts in the auto industry said the company’s high-volume production plan is impossible to achieve given the fact that only a handful plants in North America have the capacity to build 500,000 vehicles a year.

The electric car manufacturer also doubled its production target for Model 3 to 100,000 units in 2017 and 400,000 units in 2018 due to strong demand. Tesla’s net reservations for the Model 3 were 373,000 units as of May 15.

Tesla Model S Autopilot investigation

The U.S. National Highway Traffic Safety Administration (NHTSA) opened a preliminary investigation on Tesla’s Autopilot system on Thursday after a Model S was involved in a fatal crash.

The electric car manufacturer said, “This is the first known fatality in just over 130 million miles where the Autopilot was activated. Among all vehicles in the US, there is a fatality every 94 million miles. Worldwide, there is a fatality approximately every 60 million miles.”

According to the NHTSA the fatal accident “calls for an examination of the design and performance of any driving aids in use at the time of the crash.”