Cars and Drivers

If Tesla Can't Deliver 15,000 Cars in a Quarter, How Can It Hit 300,000?


Tesla Motors Inc. (NASDAQ: TSLA) management said it delivered 14,820 vehicles in the first quarter of 2016, and it plans to deliver 80,000 to 90,000 new vehicles for the full year. It has delivered at the low end of forecasts for some time, which calls into question how it can possibly reach its goals to build and deliver the nearly 300,000 Model 3 cars that are on order. Odds are high that it can’t.

Among the comments about deliveries in the first quarter:

The root causes of the parts shortages were: Tesla’s hubris in adding far too much new technology to the Model X in version 1, insufficient supplier capability validation, and Tesla not having broad enough internal capability to manufacture the parts in-house. The parts in question were only half a dozen out of more than 8,000 unique parts, nonetheless missing even one part means a car cannot be delivered. Tesla is addressing all three root causes to ensure that these mistakes are not repeated with the Model 3 launch.

If it does not address those “root causes,” Tesla will begin to fail on its promise that it can create futuristic electronic vehicles and build them in any great number.

The odds of the success of the Model 3 already have started to fade.

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