Heading into today’s car delivery estimate, Tesla had previewed that for the first half of 2017 it expects a substantial jump in vehicle deliveries. Recall that management guided for a 61% to 71% increase in Model S and Model X deliveries during H1 of 2017 compared with the first half of 2016. To achieve this goal, Tesla would need to deliver 47,000 to 50,000 vehicles in Q1 and Q2 combined. Moments ago Tesla announced its first half vehicle deliveries, and it made the low end of this guidance: just barely, with 47,100 autos delivered.
Tesla delivered just over 22,000 vehicles in Q2, of which just over 12,000 were Model S and just over 10,000 were Model X. This represents a 53% increase over Q2 2016. Total vehicle deliveries in the first half of 2017 were approximately 47,100.
However, where Tesla clearly failed to deliver was relative to sellside consensus which expected the electric car maker to sell 22,912 cars in Q2. Instead, the official number was 22,000. Which explains the very next sentence, in which Elon Musk delivered the latest the mea culpa why the company once again failed to hit expected deliveries.
The major factor affecting Tesla’s Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines. The technology challenge grows exponentially with energy density. Until early June, production averaged about 40% below demand. Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history.
Odd how this production bottleneck was never made clear to any of the analysts covering the company so they could adjust their forecasts accordingly.
Tesla also issued a conditional guidance for second half, in which Tesla said that “provided global economic conditions do not worsen considerably, we are confident that combined deliveries of Model S and Model X in the second half of 2017 will likely exceed deliveries in the first half of 2017.”
And since Tesla will likely miss, or once again just barely make its guidance, we look forward to seeing just what economic conditions will “worsen considerably” preventing Musk from hitting yet another projection.
Some other details from the press release:
Q2 production totaled 25,708 vehicles, bringing first half 2017 production to 51,126.
We always want our customers to experience the newest versions of Model S and X while their cars are in service, so we added fully loaded, newly built cars to our service loaner fleet. We always want the service loaner Tesla to be *better* than the customer car being serviced. The customer should never suffer for something that is our fault.
We also finally added a sufficient number of Model X cars to our test drive and display fleet because our stores had been operating with far short of what was needed and, in some cases, none at all. There appears to be substantial untapped sales potential for Model X. It should also be noted that production quality and field reliability of the Model X, for which Tesla has been fairly criticized, have improved dramatically. It is now rare for a newly produced Model X to have initial quality problems.
The first certified production Model 3 that meets all regulatory requirements will be completed this week, with a handover of ~30 customer cars at our Fremont factory on July 28. More details to follow soon.
And another caveat: “Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5%. Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.”
Finally, based on the latest Model X sales, it appears that the “coolness” shelf-life of a new Tesla model is just under two years.
