Previously, we looked at how Tesla Motors’ (TSLA) high revenue growth remained intact in 1Q16. In 4Q15, the company managed to deliver 17,478 cars to customers. Only 206 of those cars were Model X. Tesla cited Model X components supplier-related issues and said these issues would be resolved. Let’s find out how Tesla progressed on this front in 1Q16.
1Q16 production and deliveries
During 1Q16, Tesla produced 15,510 vehicles. That was a new quarterly production record for Tesla with a 10% production increase from the previous quarter. However, this increase wasn’t good enough to meet investors’ high expectations for the company.
In 1Q16, Tesla delivered 14,810 vehicles, an increase of ~47% from the 10,045 vehicles delivered in 1Q15. Although this positive year-over-year delivery growth looks quite impressive, it’s still below the 17,478 vehicle deliveries in 4Q15. In spite of this, investor expectations remain high. The company began delivery of its Model X toward the end of 3Q15.
Model X supplier issues
While reporting its 1Q16 deliveries, Tesla once again blamed Model X supplier parts shortages for lower production and deliveries of its Model X in January and February. These issues made the company’s 1Q16 vehicle deliveries unimpressive.
However, according to Tesla, it was able to resolve these issues at the end of 1Q16. This helped the company improve its rate of production for Model X. It also stated that in the last week of March, it was able to produce 750 Model X vehicles per week. This should allow Tesla to deliver a high number of this model in 2Q16 and onward.
Note that on March 31, 2016, Tesla unveiled its much-anticipated Model 3. The model is viewed as quite promising in the price category of $35,000 before federal incentives. Other mainstream automakers (VLUE) such as General Motors (GM), Ford (F), and Honda Motor (HMC) have revealed their intentions to bet on the growing EV (electric vehicle) market.
Next, we’ll take a look at Tesla’s gross margins in 1Q16.