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Tesla blames its own arrogance for delivery shortfall last quarter

Tesla Deliveries

Amidst all the understandable hoopla surrounding the recently unveiled Model 3, Tesla yesterday quietly put out a press release detailing the number of vehicles it delivered to customers during the first quarter of 2016.

At the close of the quarter, Tesla reported deliveries of 14,820 cars, a figure which includes the Model S and the Model X. Of that figure, 12,420 deliveries were of the Model S while the Model accounted for 2,400 of the company’s quarterly deliveries. The larger takeaway, though, is that Tesla for the quarter missed its delivery goal of 16,000 vehicles.

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While a shortfall of deliveries might ordinarily be cause for concern, the insanely high interest in the Model 3 will undoubtedly put to bed any concerns about Tesla’s longterm viability. What’s more, Tesla attributed its missed delivery goal not to a lull in demand, but rather with its inability to meet demand.

Specifically, Tesla pointed to parts shortages from suppliers as the reason for lower than expected deliveries.

The Q1 delivery count was impacted by severe Model X supplier parts shortages in January and February that lasted much longer than initially expected. Once these issues were resolved, production and delivery rates improved dramatically. By the last full week of March, the build rate rose to 750 Model X vehicles per week, however many of these vehicles were built too late to be delivered to their owners before end of quarter.

Almost comically, Tesla also laid blame for the aforementioned supply shortages on its own “hubris.” In other words, Tesla believes it made the Model X far too technologically advanced far too soon.

The root causes of the parts shortages were: Tesla’s hubris in adding far too much new technology to the Model X in version 1, insufficient supplier capability validation, and Tesla not having broad enough internal capability to manufacture the parts in-house. The parts in question were only half a dozen out of more than 8,000 unique parts, nonetheless missing even one part means a car cannot be delivered.

That aside, it’s worth noting that interest in the Model S continues to rise. Tesla made a point of noting that Q1 2016 orders were an impressive 45% higher than Q1 orders in 2015.

Yoni Heisler has been writing about Apple and the tech industry at large for over 15 years. A life long Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW. When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.