Parts shortages and ‘technology hubris’, hamper Tesla sales

Parts shortages and ‘technology hubris’, hamper Tesla sales

Tesla Motors says parts shortages hampered its electric vehicle production and sales in the first quarter (Q1) of 2016.

Q1 deliveries were almost 50% more than Q1 last year, and Tesla says it “remains on track to deliver 80,000 to 90,000 new vehicles in 2016.”

In more positive news, Tesla reported over the weekend that it had taken 276,000 orders through Saturday for its new Model 3 sedan.

In the first quarter, Tesla delivered 14,820 vehicles, including 12,420 Model S sedans and 2400 Model X sport utility vehicles (SUVS). Earlier, the company told analysts it expected to sell 16,000 vehicles in the quarter.

Tesla says “severe shortages” of parts for the Model X in January and February cut into planned production. By late March, Model X production had ramped back up to 750 a week.

Unusually, Tesla blamed the parts shortages on its own “hubris” – specifically, in adding “far too much new technology” to the Model X, including a unique set of “falcon wing” rear doors that turned out to be far more difficult to engineer than the company anticipated.

Tesla also cited “insufficient validation” of its supplier capability, as well as its own inability to manufacture some of the parts in-house.

Tesla says is it would “ensure that these mistakes are not repeated with the Model 3 launch,” which is scheduled in about 18 months.

Tesla chief executive Elon Musk says the company aims to boost annual production to 500,000 units by 2020, after the introduction of the mass-market Model 3.

Investors have expressed concerns about the company’s ability to meet ambitious production targets for the Model 3, especially after the slower-than-expected launch and production ramp-up of the Model X.

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