Tesla ( TSLA ) on Wednesday reported fourth-quarter delivery estimates that show it continues to struggle with production on its Model 3 sedans, while production numbers of Model S and Model X were in line with expectations.
[ibd-display-video id=3061218 width=50 float=left autostart=true] Tesla announced it manufactured a total of 2,425 Model 3 sedans in the fourth quarter, which is well short of where it had intended to be at this time. Of those, it delivered 1,550 Model 3s, with the remainder in transit. Analysts had expected Tesla to deliver about 4,100 Model 3s.
In total, Tesla said it delivered 29,870 vehicles, of which 15,200 were Model S, 13,120 were Model X, and 1,550 were Model 3s.
"This was once again our all-time best quarter for combined Model S and X deliveries, representing a 27% increase over Q4 2016, and a 9% increase over Q3 2017, our previous best quarter," Tesla said in a prepared statement.
But Tesla again pushed back production schedules on it Model 3, based on previous projections.
"As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles," Tesla said. It now expects to reach production of 5,000 Model 3s per week by the end of the second quarter, instead of the first quarter as previously planned.
Tesla has had a hard time getting the premium sedan off the factory floor with just 222 delivered in the third quarter. Production started in July and Tesla initially planned to be delivering 5,000 vehicles per week sometime during the fourth quarter, but that was delayed to the first quarter after encountering production bottlenecks.
IBD'S TAKE:Shares of Tesla have been consolidating since the company's stock hit an all-time high of 389.61 on Sept. 18. During this consolidation, it hit a low of 292.63 on Nov. 2. Tesla has an IBD Composite Rating of 37 out of a possible 99, and ranks ninth among stocks in the automotive group, behind first-place Fiat Chrysler ( FCAU ).
Shares of Tesla lost 1% during the regular session to 317.25 and were down another 1.7% in after-hours trading to 312 on the stock market today .
During the fourth quarter, Tesla said, "we made major progress addressing Model 3 production bottlenecks, with our production rate increasing significantly toward the end of the quarter."
In the last seven working days of the quarter, Tesla said it made 793 Model 3's. Tesla said it hit a production rate, over the last few days, on each of its manufacturing lines that extrapolates to more than 1,000 Model 3's per week.
"As a result of the significant growth in our production rate, we made as many Model 3's since December 9 as we did in the more than four months of Model 3 production up to that point," Tesla said. "Model 3 deliveries to non-employee customers are now accelerating rapidly, and we're confident our customers will love them."
Tesla acknowledged production woes with its Model 3 when it reported third-quarter results on Nov. 1 that missed earnings expectations by a wide margin. Production delays at Tesla are among the reasons a large amount of Tesla shares are sold short .
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