Tesla blames ‘hubris’ over the Model X as it falls short of quarterly delivery target

Tesla CEO Elon Musk. Photo: Alex Wong/Getty Images.

Tesla reported on Monday that it had delivered 14,820 vehicles in the first quarter of 2016, short of the 16,000 the company said it would sell.

The pace is well below what the electric-car maker needs to meet its full-year guidance of between 80,000 and 90,000 vehicles.

Unless Tesla can catch up in the coming quarters, it will have to deliver a daunting 35,000 vehicles in Q4.

Nevertheless, Tesla reaffirmed its full-year guidance in a statement.

“Tesla Q1 deliveries consisted of 12,420 Model S vehicles and 2,400 Model X vehicles,” the company said. “Q1 deliveries were almost 50% more than Q1 last year and Tesla remains on track to deliver 80,000 to 90,000 new vehicles in 2016.”

The new Model X was the culprit in the weak quarterly performance.

“The Q1 delivery count was impacted by severe Model X supplier parts shortages in January and February that lasted much longer than initially expected,” Tesla said. “Once these issues were resolved, production and delivery rates improved dramatically.”

Elon Musk and his team really fell on their swords this time around. The company cited “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” as reasons for the miss.


In case you were worried that this situation might be replicated with the just-unveiled Model 3 and production on the nearly 300,000 cars that have been preordered, Tesla addressed that concern.

“Tesla is addressing all three root causes to ensure that these mistakes are not repeated with the Model 3 launch,” the company said.

Tesla shares closed at $247 in trading on Monday, but dipped a bit to $241, down 2% in after-hours action.

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