For much of this year, Tesla projected deliveries of 55,000 Model S and Model X cars in 2015.
However, the electric automaker has softened on that projection in its second quarter investor letter.
“We are now targeting deliveries of between 50,000 and 55,000 Model S and Model X vehicles in 2015,” Tesla wrote.
According to Tesla, the lowered projection could be a result of complications that are likely to arise when production of the Model X crossover ramps up this fall.
“We do think it’s going to be a challenging production round on the [Model] X,” Tesla CEO Elon Musk said on a conference call with analysts after the company reported second-quarter earnings, which beat expectations.
“We only want to deliver great cars. We don’t want to drive to a number that’s greater than our ability to delivery high-quality vehicles.”
Since the S sedan and the new X crossover are built on the same assembly line, Model S production could be affected if the Model X experiences production teething problem.
In the investor’s letter, Tesla wrote:
We are still testing the ability of many suppliers to deliver high quality production parts in quantities sufficient to meet our planned production ramp. Since production ramps rapidly late in Q4, a one-week push out of this ramp due to an issue at even a single supplier could reduce Model X production by approximately 800 units for the quarter. Furthermore, since Model S and Model X are produced on the same general assembly line, Model X production challenges could slow Model S production. Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former. To build longterm value, our first priority always has been, and still is, to deliver great cars.
In an email to Business Insider, Motley Fool analyst Matt Argersinger zeroed in on the weaker guidance. “It looks like Model X production and supply issues are hindering production confidence for the remainder of the year,” he wrote.
“They’re expecting the same number of deliveries in Q3 as in Q2, which means they will need almost 17,000 deliveries in Q4 just to hit the low end of the range. That’s going to be a tall order, especially if they run into unexpected production issues.”