Tesla CEO Elon Musk has a reason to rejoice as the company has hit the low end of its target of delivering at least 50,000 vehicles in the year. On Sunday, the EV firm informed investors that it shipped 17,400 units in the fourth quarter of 2015, taking the yearly total to 50,580 units, including a few hundred units of the Model X SUV.
Production issues to blame
In a February letter to shareholders, Tesla projected that it would ship 55,000 vehicles in the year. However, in November, it revised the target to a range of 50,000 to 52,000 vehicles owing to problems faced with manufacturing more than one vehicle at a time. The company is producing two all-electric vehicles, the Model S and Model X, on a shared assembly line in Fremont, Calif. For the quarter, the company guided to ship 17,000 to 19,000 vehicles.
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Announcing the fourth quarter delivery number, the EV firm said in a statement: “Model X deliveries are in line with the very early stages of our Model X production ramp as we prioritize quality above all else.”
Musk, who got the first Model X, has been candid about the engineering and other associated challenges with the company’s manufacturing. The vehicle is known for sporting complex and distinct features such as the falcon-wing doors, independently operable second-row seats and a large, panoramic windshield.
Good for Tesla
In an interview with Bloomberg on Sunday, Robert W. Baird analyst Ben Kallo said it is good news that “they hit within their guidance. The X number is lower than some expectations, but production has picked up nicely.”
Kallo has a Neutral rating on the company’s stock.
In a high profile event on Sept. 29, the automaker turned over the first six Model X SUVs to their owners, and over the holidays, deliveries were accelerated. In the last quarter, the EV firm produced 507 Model Xs but shipped only 208 units. On Sunday, the company said that the weekly output will be about 238 SUVs based on last week’s daily production rate.
In pre-market trading today, Tesla shares were trading down. In 2015, the stock was up by over 9%, while in the last one month, it is up by over 3%.