Home / Business / Tesla deliveries up 70% but may fall short of 2016 forecasts – Los Angeles Times
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Tesla deliveries up 70% but may fall short of 2016 forecasts – Los Angeles Times

Production problems and parts shortages at Tesla gummed up delivery of its high-end electric cars at the start of the year, but the company’s Fremont assembly plant was running smoother in the third quarter.

The company said deliveries of its Model S sedan and Model X SUV hit 24,500 from July to September, up 70% from the second quarter.

But that might not be enough for Tesla to meet its earlier forecast of 80,000 to 90,000 deliveries in 2016.

In a media release, the company said “guidance of 50,000 vehicles for the second half of 2016 is maintained.”

That means 25,500 cars in the fourth quarter — or 75,190 for the year.

In January and February, the Model X was plagued by product shortages, which Tesla blamed on the “hubris” of trying to install too much technology too soon. Those problems seem to be behind it, though. In the first quarter, the company delivered 2,400 Model Xs. In the third quarter, there was a near quadrupling, to 8,700 of the SUVs.

Model S third-quarter deliveries came in at 15,800.

It’s unclear how many deliveries might be due to price cuts. Tesla retailers were reportedly offering discounts on new cars. Elon Musk, the Los Angeles-based tycoon and chief executive at Tesla, sent a message to retailers telling them never to discount a new car. He allowed that some slightly used models could be sold at a discount.

It’s also unclear what the delivery numbers will mean for Tesla’s stock, which as of Sunday night sold for $ 202.50 a share. The stock has been on a roller coaster since it announced a controversial merger with SolarCity last June.

Tesla is under heavy pressure to boost production in dramatic fashion, and not just to sell more high-end cars.

For one thing, cash flow issues are forcing Musk to prepare for new financing, either debt or equity, or both. Investors will want to feel confident about Tesla’s ability to manufacture cars on time, with consistency and high quality.

For another, the company plans to start production of its midrange $ 35,000 Model 3 by the end of next year. Musk said the company will be pumping out half a million cars annually by the end of 2018. That’s five times today’s production level.

russ.mitchell@latimes.com

Twitter: @russ1mitchell

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