Tesla Motors announced today they’d (barely) hit their electric car sales target for Q4 2015 and for all of 2015. This was another make-or-break moment for the company. While the Model X launch is not quite as significant as the Model S launch in 2012, launching production of a second electric car is a stepping stone away from the “one trick pony” status and towards being a full fledged automaker. Tesla still has a long ways to go to reach that status, but they’re on the way. As a practical financial matter, the Model X is expected to reach a whole new range of customers and greatly expand Tesla’s total sales volume and impact on the automotive market.
In other words, where there is concern that Tesla Motors saw large losses the last few quarters, we need to look for signs that the investment in R&D of the Model X and production facilities will pay off in more sales and revenue. Some have, like Bob Lutz, weighed in to say Tesla is in trouble by continuing to operate at a financial loss. Instead, the company is clearly making a big bet that’s compatible with pure capitalism — manufacturer see’s an opportunity, manufacturer invests in designing a product and builds a factory, in the hope their product will succeed.
Over the last two years Tesla’s staff had advised us that the latter part of 2015 would see a large production/sales spike. Production of the Tesla Model X would start in the latter part of the year, and then rapidly ramp up so that Tesla would deliver over 50,000 vehicles in 2015. Just two years ago Tesla’s capacity was just 21,000 vehicles per year. In other words, Tesla’s delivery capacity has expanded by 2.5x in two years. The Model X is expected to significantly increase sales over the coming year.
As you read the following press release — and you read news reports on other sites about Tesla’s achievement — consider what you’re being told.
Yes, Tesla Motors had originally projected 2015 deliveries would be 55,000 and then later scaled back the projection. Therefore it’s correct to say “Tesla Motors hits low end of Q4 delivery guidance” — but does that tell the whole story?
What company more than doubles sales of as complicated a product as an automobile, starts production of a second even more complicated product, and is also able to 100% accurately predict their ability to ramp up production? We do need to hold Tesla Motors accountable to their promises, and shame them when projections are missed, but at the same time we need to recognize their achievements.
Some points from the press release (below)
- 17,400 vehicles delivered in Q4 2015 – total of 50,580 vehicles in all of 2015
- That’s 48% more than their prior quarterly deliveries record, and 75% growth year-on-year
- The deliveries is split: 17,192 Model S, 208 Model X
- One might think this is disappointing Model X production rate, but the company claims this rate is compatible with the early stage of Model X production where they’re focused on debugging the process
- Production rate has reached 238 Model X’s per week — annualized that’s a rate of about 12,000 Model X’s per year
It’s important to note that Tesla is reporting deliveries. There will have been vehicles produced during Q4 2015 that have not yet been delivered. These numbers are also worldwide deliveries, because Tesla Motors doesn’t break them down by region.
According to news sources which track U.S. electric vehicle sales, the Tesla Model S is outselling the #2 electric car (Nissan Leaf) by a huge margin. Through November 2015 there’d been 15,000 Leaf’s sold, and 22,000 Model S’s sold, in the U.S. We do have to weigh this against the fact that customers knew Nissan would deliver a better Leaf at the end of 2015 and were probably waiting for the 2016 Leaf (which ended up having a 30 kWh pack, and a 107 mile electric range), which surely dampened Leaf sales. Even considering dampened Leaf sales, this strikes me as significant testament to Tesla’s success.
Tesla Delivers 17,400 Vehicles in Q4 2015; Total 2015 Deliveries Were 50,580
PALO ALTO, CA — (Marketwired) — 01/03/16 — Tesla (TSLA) (NASDAQ (NBI): TSLA) Q4 deliveries consisted of 17,192 Model S vehicles and 208 Model X vehicles. (507 Model X vehicles were produced during Q4 with the remainder to be delivered in early Q1.)
Q4 Model S deliveries were approximately 48% more than our prior quarterly record and approximately 75% more than Q4 last year. Model X deliveries are in line with the very early stages of our Model X production ramp as we prioritize quality above all else. That ramp has been increasing exponentially, with the daily production rate in the last week of the year tracking to production of 238 Model X vehicles per week.
There may be small changes to this delivery count (usually well under 1%), as Tesla only counts a delivery if it is transferred to the end customer and all paperwork is correct.
Our vehicle deliveries represent only one measure of our financial performance and should not be relied on as an indicator of our quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.
Source: Tesla Motors, Inc.
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