Electric car firm Tesla (NASDAQ:TSLA) saw shares down on Wednesday as it blamed a shortfall of batteries on its second quarter delivery numbers, which disappointed the market
The group said it delivered just over 22,000 vehicles in the three months, of which just over 12,000 were Model S and just over 10,000 were Model X.
This is a 53% increase compared to the second quarter of 2016. Total vehicle deliveries in the first half of 2017 were approximately 47,100
The statement said however "The major factor affecting Tesla’s Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines.
"The technology challenge grows exponentially with energy density. Until early June, production averaged about 40% below demand. Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history."
Provided global economic conditions do not worsen considerably, Tesla said it was confident that combined deliveries of Model S and Model X in the second half of 2017 would exceed deliveries in the first half of 2017.
Tesla shares in the doldrums..
Tesla shares finished down 2.5% at $352.62 following the shortened trading session on Monday and are today slumped almost 7% to $328.16.
But on Monday this week, the firm revealed it will begin rolling out its first mass-market electric car, the Model 3, on Friday. Musk revealed on Twitter that production is starting two weeks ahead of schedule after receiving regulatory approval. The first 30 customers will receive the Model 3 at a handover party, he said. He also said he expected production to ramp up quickly with 100 vehicles in August, a further 1,500 or more in September, and 20,000 per month by December The Model 3 will be priced at about US$35,000, making it much more affordable than the company’s other ranges that typically sell for at least US$90,000. It marks Tesla’s first step as a producer of mass-market electric cars as the group has previously focused on the output of luxury vehicles in relatively small numbers. In 2016, Tesla produced about 85,000 vehicles.
But Baird is upbeat....
Meanwhile, Baird analyst Ben Kallo reckons weakness in Tesla shares seen today will be shortlived as investors start looking ahead to the Model 3 launch, set to be introduced on July 28.
Kallo reiterated his outperform rating and stock price target of $368 - 4.4% above Monday's closing price of $352.62.
"The release of Q2 deliveries was another de-risking event for the stock, and we expect shares to trade higher as investors are increasingly able to focus on the Model 3," the analyst said.