Tesla Inc. said late Wednesday it delivered 29,870 vehicles in the fourth quarter, slightly less than expectations, and pushed back a Model 3 production target to the second quarter of this year while seeking to assure investors it had figured out the “bottlenecks” that have plagued the sedan’s early production.
Tesla TSLA, -0.51% said it delivered 1,550 Model 3 sedans, 15,200 Model S sedans, and 13,120 Model X SUVs in the fourth quarter, and that more than 800 Model 3s were in transit. Analysts polled by FactSet had expected about 30,000 vehicles delivered in the quarter, with about 4,000 expected to be Model 3.
|Model name||Actual Q4 deliveries||FactSet expectations|
The Silicon Valley car maker said it made “major progress addressing Model 3 production bottlenecks,” with the production rate increasing “significantly” toward the end of the quarter. It added, however, that it now expects to reach a production rate of 5,000 Model 3 sedans a week by the end of the second quarter.
Tesla had promised shareholders it would ramp up Model 3 production to 5,000 sedans a week in 2017 and then on to 10,000 a week in 2018, but production bottlenecks disclosed in October had led the company to push back its 2017 goal to late in the first quarter of 2018, putting pressure on the company’s cash position.
In July, ahead of the Model 3 launch, Chief Executive Elon Musk tweeted even loftier aspirations for the car’s production ramp:
Looks like we can reach 20,000 Model 3 cars per month in Dec— Elon Musk (@elonmusk) July 3, 2017
The Model 3 is a key component of Tesla’s growth strategy, as the sedan’s lower price tag, starting around $35,000, is aimed at a broader market than Tesla’s luxury offerings. Earlier Wednesday, General Motors Co. GM, -0.27% said it sold more than 20,000 Chevy Bolts in 2017, with a December tally of 3,227 vehicles, the Bolt’s best sales month yet. The Bolt starts at about $38,000 before tax credits.
Related: U.S. auto sales slip in December
Tesla said in early August that it had 455,000 reservations for the Model 3, and has not updated that data point since. Prospective Model 3 buyers have to put down a $1,000 deposit on the car and can expect to get their car in 12 to 18 months, according to Tesla’s website.
“In the last seven working days of the quarter, we made 793 Model 3’s, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3’s per week,” the company said in a statement Wednesday. “As a result of the significant growth in our production rate, we made as many Model 3’s since December 9th as we did in the more than four months of Model 3 production up to that point.”
Tesla said it continues to focus on quality and efficiency rather than “pushing for the highest possible volume in the shortest period of time,” and it expects “a slightly more gradual ramp through Q1,” likely ending the quarter with a weekly rate of about 2,500 Model 3 vehicles.
Tesla disclosed deliveries of 26,150 vehicles in the third quarter, including 220 Model 3 sedans, then slightly beating expectations of slightly less than 26,000. The company delivered 47,077 vehicles in the first half of the year, giving it an annual total topping 100,000.
Tesla reported 22,000 vehicles delivered in the fourth quarter of 2016, which was below expectations of about 25,000 vehicles.
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Unlike other car makers, which disclose monthly sales often broken down by region, Tesla offers only quarterly production and delivery numbers by model. In the Wednesday statement, the company cautioned its delivery count ”should be viewed as slightly conservative,” and final numbers could vary by up to 0.5%.
In terms of production, Tesla said it produced 24,565 vehicles in the fourth quarter, of which 2,425 were Model 3. The company produced 24,882 Model S and Model X vehicles in the fourth quarter of 2016.
“As we previously indicated, we slightly reduced Model S and X production in Q4 because of the reallocation of some of the manufacturing workforce towards Model 3 production, which also caused inventory to decline,” Tesla said.
Tesla shares were down 2.8% in premarket trade Thursday, extending late-session losses from Wednesday. The stock has gained 40% in the past 12 months, compared with gains of 20% for the S&P 500 index SPX, +0.67% and 25% for the Dow Jones Industrial Average DJIA, +0.89% .