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Eyes on Model X production as Tesla aims for 79k delivery target

Saturday, October 1, 2016 21:57
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Fresh from a tour of the Tesla factory at the end of August, Motley Fool analyst and Tesla owner Daniel Sparks says he knows what it will take to meet the company’s annual delivery goal of 79,000 vehicles — a big increase in Model X deliveries. The company had originally set out to deliver between 80,000 to 90,000 vehicles this year but later reduced its guidance to 79,000 after experiencing less than expected deliveries in the past quarter as a result of Model X production delays. However the latest insight coming from Sparks suggests that Tesla could be poised to hit a big Q3.

Sparks says when he visited the factory he saw as many Model X as Model S vehicles in production. What impressed him most was that the Model X side of the factory was equipped with 580 robots compared to the 160 used for Model S production. This is inline with what Tesla CEO Elon Musk said during the company’s second-quarter earnings call. “I think in sort of a nutshell, the way to think about Tesla right now is that we are right around 2,000 cars a week, and we’re trying to balance the mix to be roughly half X and S.”

Assuming a consistent production of 2,000 cars per week for the past quarter, nearly 12,000 Model X will get built during the third quarter. That’s good news, since the company needs to deliver between 20,000 and 23,000 cars in Q3 in order to have any hope of reaching its yearly target.

Tesla is expected to announce its Q3 delivery numbers no later than Monday. Musk believes the factory can increase production to 2,200 cars a week by the start of Q4 and expects 2,400 cars a week to be possible by the end of the year. Assuming the company delivers 20,000 cars in the third quarter, it will still need to get another 30,000 into the hands of customers by year end to hit its revised annual guidance of 79,000. As Sparks says, “This sort of growth won’t be easy. But Tesla’s recent progress with production suggests it may be possible.”

That will depend on the actual numbers for Q3. Sparks believes the minimum number needed to maintain investor confidence in the annual target is 21,000 deliveries during the quarter just ended. If Tesla meets or exceeds that number, its chances of getting to 79,000 for the year will look a lot brighter.

Source: Motley Fool

The post Eyes on Model X production as Tesla aims for 79k delivery target appeared first on TESLARATI.com.

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