Tesla Stock Down After Missing Delivery Forecast

Tesla Stock Down After Missing Delivery Forecast
Blomst / Pixabay

Tesla reported fourth-quarter deliveries that fell short of its forecasts again as production delays continued to trouble it. The news pushed the stock down 2.4% in after-hours trading on Tuesday. In a statement on Tuesday, the electric car maker said it delivered about 22,000 cars in the final three months of last year.

Record net orders for the Model S and Model X

The total deliveries trailed Tesla’s implied projection of 25,000 units, bringing its full-year tally to 76,630 cars, which was below its forecast for at least 80,000 units. According to Tesla, short-term production problems related to new hardware for the Autopilot driver-assistance system contributed to the delay in transport and prolonged delivery of about 2,750 cars to customers.

However, Tesla reported all-time record net orders for the Model X and Model S in the fourth quarter, up 52% from last year. At the end of the quarter, about 6,450 cars were en-route to customers. They will be counted as deliveries for the first quarter of 2017. In a press release, the EV firm said the numbers “should be viewed as conservative” because it counts the car as delivered only when it has been transferred to the customer with all the paperwork completed.

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In a report on Tuesday, Barclays analyst Brian Johnson stated, “There is a high risk of execution missteps, a challenged track record on meeting timelines, cost challenges, and potential impact from an otherwise full plate of initiatives in ’17.”

There is a “high probability” that the electric car maker will announce a delay for the Model 3 and estimate zero deliveries of the car for 2017, said Johnson.

Will Tesla deliver the Model 3 in time?

Tesla CEO Elon Musk has a history of setting ambitious timelines and high targets but coming up short. Musk aims to transform the EV firm from a niche player to a high-volume manufacturer. The pressure on the Palo Alto-based company to make good on its goal has increased following the SolarCity merger last year, as both companies have typically reported losses.

According to Bloomberg Intelligence auto analyst Kevin Tynan, “They flipped every switch to get every vehicle delivered in the third quarter. The fourth quarter is the payback. It feels like the Model 3 can’t get here fast enough because demand for the Model S is softening as it gets deeper into its life cycle.”

On Tuesday, Tesla shares closed up 1.54% at $216.99. Last year, the shares declined 11%, which was Tesla’s first annual decline since its initial public offering in June 2010.

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