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Published on July 3rd, 2016 | by Zachary Shahan


Tesla Produced 20% More Cars In Q2 2016 Than Q1 2016, Missed Production & Delivery Guidance

July 3rd, 2016 by  

Model X Don MaxMoments ago, Tesla released its quarter 2 (Q2) 2016 production/delivery figures — well, the generic stats, not country-specific or month-specific figures.

As indicated in the title, Tesla produced 20% more vehicles in Q2 than in Q1 — 18,345 vehicles vs 14,820 vehicles. That’s another quarterly record for Tesla. Though, Tesla’s previous estimate for Q2 production was ~20,000.

Tesla production didn’t quite reach 2,000 vehicles per week in Q2, but the good news is that there was a steep ramp toward the end of the quarter that nearly got the company to that number, and nearly 50% of Q2 production occurred in the last month of the quarter. That’s a good sign, of course, since it shows that:

  1. Tesla has successfully worked through more and more of the bugs hampering Model X production.
  2. Demand for the Model S and X doesn’t seem to have tapered off.
  3. Tesla is showing its continued capability to increase production capacity at a rapid clip.

One of the most shocking stats from the release, imho, is this beauty (emphasis mine): “Tesla expects to produce and deliver about 50,000 vehicles during the second half of 2016, approximately equal to all of 2015.” Naturally, that 50,000 projection is also related to the fact that Tesla basically needs to deliver that many vehicles in the second half of the year in order to meet its guidances of 80,000–90,000 delivers in 2016. I’m sure some bears are jumping on this fact right now with watering mouths as they write up their stories about Tesla’s impending collapse, destruction, and swift fall into Hell.

Bearish claims regarding Tesla demand have been popular for years, even going back to when Tesla was just producing a few hundred (or tens!) of cars a month. Yet, demand seems to keep growing fine enough, since these Teslas must be getting bought by real, live human beings. Also worth noting is that Tesla doesn’t do much advertising and doesn’t offer fleet deals or other discounts for any reason, not even to members of the family (SolarCity CEO Lyndon Rive tried to get one and couldn’t).

The negative news of the quarter is that Tesla’s delivery and production numbers were a bit lower than projected, due to the production ramp occurring at the end of the quarter and a lot of vehicles being in transit. The production discrepancy was noted above, and here are delivery numbers on that:

  • 14,370 vehicles delivered in Q2, versus ~17,000 projected vehicle deliveries in Q2, based on the Q1 shareholder letter
  • 9,745 Model S + 4,625 Model X delivered in Q2
  • 5,150 customer-ordered vehicles in transit at end of Q2 (compared to 2,615 vehicles in transit at end of Q1)

These numbers will feed into my next US electric car sales report, which is coming out in a few hours or so.

Here’s the full press release from Tesla Motors:

Tesla Q2 2016 Vehicle Production and Deliveries

Palo Alto, CA – July 3, 2016 — Tesla produced 18,345 vehicles in Q2, an increase of 20% from Q1, and exited the quarter consistently producing just under 2,000 vehicles per week. Due to the steep production ramp, almost half of the quarter’s production occurred in the final four weeks.

With continued productivity improvements, Tesla expects output to reach 2,200 vehicles per week in Q3 and 2,400 vehicles per week in Q4. Current order rate trends and backlog support production at those levels. In total, Tesla expects to produce and deliver about 50,000 vehicles during the second half of 2016, approximately equal to all of 2015.

Due to the extreme production ramp in Q2 and the high mix of customer-ordered vehicles still on trucks and ships at the end of the quarter, Tesla Q2 deliveries were lower than anticipated at 14,370 vehicles, consisting of 9,745 Model S and 4,625 Model X. In total, 5,150 customer-ordered vehicles were still in transit at the end of the quarter and will be delivered in early Q3. That amount was higher than expected (there were 2,615 vehicles in transit to customers at the end of Q1) and is more than a third of the number of cars that completed delivery in Q2.

* * * * *

There may be small changes to the Q2 delivery count (usually under 1%), as Tesla only counts a delivery if it is transferred to the end customer and all paperwork is correct.

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.

Image by Kyle Field | CleanTechnica

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About the Author

is tryin' to help society help itself (and other species) with the power of the word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as a solar energy, electric car, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

  • Martin Lacey

    A new battery pack using different sized cells will require new software, new hardware and a new BMS. It may alter the centre of balance and could raise the ride height slightly requiring modified under carriage and suspension. Then there’s the delivery of power to the motor which would need remapping.

    I think you’d end up with virtually a new vehicle, which may well require a modified production line. I think Tesla need to pump out as many S/X cars as possible to expand the Super Charger network and invest into Model 3 infrastructure.

    But this is Tesla we are talking about and anything is possible!

    • JP

      But they’re already having to do most of that work for the Model 3’s battery pack anyways. I agree that they would have to run tests and alter the suspension and ride height…and I guess that would mean altering the vehicle manufacturing a bit, too.

      But regarding my first point: with cell manufacturing beginning at the Gigafactory this month, what are they going to be putting all of those cells into for the next year and a half? That’s a lot of cells just for Tesla Energy.

      • Bob_Wallace

        I expect we’ll see a S/X model with a 400 mile range before long.

        And it will be based on the larger format cells that the T3 will use.

        And about the same time the lower range S/Xs will move to the larger cell.

        • JP

          Do you think that would be introduced between the Gigafactory production starting and the Model 3 launch? I feel like it must, because where else will the cells go? An updated Powerwall/Powerpack suite?

          • Bob_Wallace

            I don’t know. I don’t think it will happen until the Gigafactory is running smoothly at a large rate of production. But I’d bet the design changes have already been done, were done around the time the decision was made to move to a larger cell.

            The cells coming out of the Gigafactory are likely to be a lot cheaper than what Panasonic can build in it’s Japanese plants. Plus there are shipping costs. I’d think Tesla would move to the larger cells ASAP in order to maximize profits.

          • JP

            Yep, completely agree. Maybe not all of their products at once, but it definitely makes sense to change over everything sooner rather than later. With how painful the Model X launch/ramp up has been, though, maybe they’ll want to hold off on changing the Model S and X battery packs until early-to-mid next year.

          • Bob_Wallace

            Or later. The priority has to be manufacturing enough battery packs for the T3. They can (I guess) keep making S/X packs with Japanese cells.
            Ramping up to 500k and then a million EVs a year is going to be an incredible job. Maybe they won’t want to have too many other things going on at the same time.

            Or, maybe the GF is ahead of schedule and they can move on the S/X first.
            I only got guesses….

      • Martin Lacey

        I’m guessing at power wall and power pack seeing as how the assembly line is at GF1.

        I expect that the new M3 cells are some time away from mass production and will undergo several months cycling and testing. Again purely speculative.

  • JP

    Is anyone else wondering if Tesla is planning on releasing a brand new battery pack for the Model S and X later this year that incorporates the new cells produced by the Gigafactory? It would make sense in a number of ways:

    – Gigafactory cell production begins this month, but no Model 3’s for more than a year. No way that Tesla Energy uses all of them and no way they produce them only to have them sit around for over a year.
    – Musk has already said that they may (for some period of time) be sourcing Samsung for Tesla Energy’s cells.
    – Lastly, it wouldn’t make sense to debut the more advanced battery in the lowest-price model.

    My guess is that the second “big event” later this year will reveal more about the Model 3, but also announce the new battery pack for the Model S and X. I’d expect much more range from it as well, which would recharge Model S demand.

  • NRG4All

    When I worked at Intel, they had a measurement ratio that was called, “bookings to billings”. Basically that measured the ratio of new orders received versus completed sales. I would find that helpful to measure just how strong the sales versus the cars delivered is. This coupled with their production numbers would really tell us what the immediate future looks like at a glance from period to period.

  • dogphlap dogphlap

    Forecast 35% increase in deliveries over last year for Q2 2016, achieved 20%.
    Big increase towards the end of the Q2 means a large number of cars were not counted because they were in transit to customers. All sounds pretty standard for Tesla Motors, nothing to get excited about either way.

  • JP

    Wish they would’ve reported the split of Model X’s and S’s produced rather than delivered. Still doesn’t answer the question of how fast Model X’s are coming off the line.

    Curious how the Q2 financials will look. I know I say that all the time, but if this Model X ramp were going better it would be easier! Anyone know if Tesla counts un-delivered vehicles as Unearned Revenue? If so then maybe they haven’t “officially” hit positive cash flow from operations yet, thanks to the “In Transit” vehicles.

    Really hoping the ramp up for the Model 3 isn’t this excruciating. Here’s hoping the manufacturing boss they hired from Audi can greatly help.

    • Yes. A straight table of deliveries, production, and previous estimates would have been nice.

      • JP

        I’m wondering if the number of units “In Transit” is because Tesla is now delivering a lot more to China and Europe…or if their shipping company is struggling. Or a possible pessimistic explanation: a lot of Model X’s had to be retrofitted after coming off the production line to fix something.

        It’s most likely not the pessimistic explanation, just trying to think of all possibilities. This Model X launch/ramp up has been frustrating, so it’s not out of the realm of possibility.

        If I saw Tesla’s Q2 “Ending Cash Balance” higher than Q1, and “Short-Term Debt/Line of Credit” amount lower than end of Q1, I’d feel a great deal better about the Model 3 launch/ramp AND the acquisition of SolarCity.

        • Bob_Wallace

          Units going to China are spending about two weeks in transit. (10 days from LA to Shanghai by container ship at normal cruising speeds.)

          Europe might take as long given a trip across the US first and then delivery inland.

          Tesla could have a quarter to half a month’s production in between factory and customer at any time. Add in some prep time once the vehicle arrives in country?

          • neroden

            I think the vehicles in transit are going to be a permanent feature of all quarterly reports.

    • jeffhre

      “Anyone know if Tesla counts un-delivered vehicles as Unearned Revenue?” Nope.

    • neroden

      Payment is not due until delivery, so revenue is not booked until delivery.

      • JP

        In that case, Tesla may still post a non-GAAP operating loss for the quarter due to so many vehicles not yet delivered/paid for. Assuming there are no more issues with the Model X’s coming off the production line, then this isn’t too concerning.

        Still, that feels like a LOT of vehicles in transit. Hopefully they’re jumping all over the shipping company for this.

        • jeffhre


  • Martin Lacey

    Target exceeded if you count vehicles in transit. But the bears will ignore that fact!

    • Definitely. They’d ignore if Tesla beat guidance. 😀

      • jeffhre

        No. They would claim Tesla lowballed the expectations and both production and deliveries were below their personal expectations for the quarter, more proof Tesla is not capable of producing what it promises, demand is falling and it will soon be bankrupt.

      • Frank

        I think the most important number is the ending weekly run rate. That’s what they are starting the next quarter with, and maybe how few the problems with the vehicles coming off the line.

  • mikgigs

    well, somehow they still learning. the short difference is not so big as before

  • Mike

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

    So, (18,345/2) = 9,172 in the last four weeks or (9,172/4) = 2,293 in a week “almost”.

    Sounds like perhaps 2,200 units a week (?)

    • Bob_Wallace

      To hit a rate of 500,000 per year Tesla will have to step it up to close to 10,000 per week.

      There’s some steep ramp climbing to be done….

      • Martin Lacey

        Model 3 is designed from the ground up with simplified production in mind, making 500k possible with Model S and X included in the figure!

        $2Billion funding recently announced for production ramp.

      • Mike

        Agreed. If sucsessful, it will become a source of study for a generation……

      • racurrie

        Indeed. model 3 will be all new, parallel production lines though.

        so that’s 2.5 more years of S & X production increases.
        plus 1.5 years (max) of model 3 ramp up.
        totally achievable I think. if model 3 delivers on the designed-for-manufacturing promise.

        the 500k/year target has been widely miss-reported. my understanding was it was “reach a rate of 500k/year in 2018” which means, at a minimum, 500,000/52 vehicles manufactured in the final week of 2018

    • hmm, weird, so don’t get why they worded it the way they did in the press release.

    • Martin Lacey

      How many of those vehicles produced in the last 4 weeks are still in transit?

      • jeffhre

        “In total, 5,150 customer-ordered vehicles were still in transit at the end of the quarter and will be delivered in early Q3.”

        Uh oh, news of more 5150’s from California.

        • JonathanMaddox

          That’s involuntary commital to psych hospital? Ouch.

  • Footsoldier

    has Tesla ever met a Q forecast ?

  • Shiggity

    The gross margin % is what is important and they are hiding it…

    Tesla Motors can cleverly hide statistics because they don’t have dealerships, that’s why all the other car makers hate them.

    While every big automaker uses loopholes 24/7, Elon created a loophole that beat them all and they don’t like it.

    • I don’t think they ever share that kind of thing in these brief quarterly sales reports (which I think were a response to analysts/media complaining that we had to wait too long for Tesla’s sales numbers). Gross margin is in the quarterly shareholder letters/reports, of course.

    • neroden

      The gross margin is published quite clearly in the annual report and probably the quarterly report. This is just a production stats number..

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