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Car and Driver: Off-Course But Aiming High: Tesla Misses Delivery Targets for First Half of 2016

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2016 Tesla Model X P90D

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Tesla is on an extraordinary trajectory. Between the cars, and the company’s potential in energy storage and distribution, it’s a catalyst for change, with its sights set well past only the smug, green-affluence crowd. Yet some other days it can seem a bit like a moonshot that hasn’t yet left the upper atmosphere.

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This July 4th weekend was one of those reality checks. CEO Elon Musk has targeted 500,000 global annual sales by 2020. Yet here we are, halfway through 2016, and the automaker is projecting sales of just a tenth of that figure for the calendar year.

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As a quarterly sales update just confirmed—released during the holiday weekend, so it wasn’t going to be positive—the California automaker is indeed a long, long way from getting there. Tesla announced that it sold 14,370 vehicles globally in the second quarter of 2016, including 9745 Model S sedan deliveries and 4625 deliveries of the Model X SUV.

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That’s down slightly from the company’s total first-quarter deliveries of 14,820; it’s also the second consecutive quarter in which Tesla has missed its forecast target numbers of 16,000 and 17,000, respectively, for Q1 and Q2. And the automaker is now anticipating that worldwide deliveries for this entire calendar year will be about on par with last year’s total—about 50,000—despite having launched the Model X crossover.

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Tesla cages this by noting that there were 5150 (additional) vehicles in transit to customers at the end of the second quarter; the automaker had cited 2615 vehicles on the way to customers at the end of the first quarter.

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The automaker has been dealing with widespread reports of quality control issues on the Model X, and even Elon Musk has admitted that the SUV, with its falcon-wing door arrangement, was overly ambitious. The company filed a lawsuit earlier this year against one of its earlier suppliers for the door mechanism, Hoerbiger, blaming them in part for the model’s production delay.

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It’s important to keep this all in perspective. Tesla’s numbers make them more than a minor niche automaker. Its year-to-date U.S. sales (estimated at 15,3000 through May) are well past those of Jaguar, and not too far behind Porsche or Mini.

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And there are also plenty of shiny things, and an ambitious vision, to take the focus off the dry vehicle deliveries numbers: There’s the ongoing potential rebranding of SolarCity assets with the Tesla name; the massive Gigafactory battery plant and its capability to supply other automakers; and the ever-expanding Supercharger charging network that’s far better coordinated, on a cross-country basis, than the mishmash of other charging-network efforts.

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That’s before talking about the potential of the Model 3. That $35,000-and-up model, introduced March 31 in prototype form, but not arriving until late 2017 even by Musk’s chronically optimistic estimates—with plenty of questions about production reality, pricing, and profitability yet to be answered—can partly be credited for a run-up in the company’s stock, and a new wave of frenzy that’s lasted through this period of lackluster ground-level, cars-in-driveways deliveries.

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Tesla has a series of hurdles that further complicate its path. The company, with its sales showrooms modeled after Apple stores, and at-your-door service that puts some exotic brands’ to shame, is still grinding away in a state-by-state battle with the franchised-dealer sales establishment. And this past week, Tesla had another issue to contend with: The National Highway Traffic Safety Administration announced that it was opening a preliminary investigation into the design and performance of the Autopilot system in the Tesla Model S, after Tesla revealed that the system failed to prevent a collision with a turning semi tractor-trailer.

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Autopilot is a feature that Tesla could retract or modify quite easily through its over-the-air updates to core vehicle functions. But it’s going to take a lot more than running on autopilot to get back on course and meet those sales targets.

-KwnBEiiQ0OU

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