Tesla Says Q2 Deliveries Fall Short Due To 'severe' Battery Production Shortfall

By Ciara Linnane Markets MarketWatch Pulse

Tesla Inc. said Monday second-quarter deliveries came to 22,000 vehicles, up 53% from the year-earlier period but well below the company's guidance of 47,000 to 50,000 vehicles provided with its first-quarter earnings in May. The company said the main cause of the miss 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," the company said in a statement. "Until early June, production averaged about 40% below demand." Once the issue was resolved, June orders and deliveries were strong, "ranking as one of the best in Tesla history," said the statement. For the first half, deliveries came to about 47,100 cars. Tesla said assuming global economic conditions do not deteriorate, it is confident that deliveries of Model S and Model X in the second half will exceed the first-half number. Production totaled 25,708 vehicles in the second quarter, bringing first-half production to 51,126. Shares closed regular trading down 2.5% and were extending that loss in after-hours trade. The shares have gained 65% in 2017, while the S&P 500 has gained 8.8%.

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