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Tesla Admits Incompetence Behind Sluggish Sales Growth

06 Apr

Tesla sales, Tesla growth

Tesla concedes that its hubris and lack of capability has contributed to its slow sales growth

Tesla Motors said its first-quarter global sales grew to 14,820 automobiles, up by half over a year ago but crimped due to supply shortages and, what the automaker stated, its own “hubris”.

The electric vehicle manufacturer had forecasted deliveries of 16,000 units in the year’s first quarter, a figure little less than the 17,400 vehicles sold in the past three months. The company does not reveal sales figures region-wise.

In the first quarter of the year, Tesla said it delivered 2400 Model X SUVs and 12,420 Model S vehicles. It blamed trouble in producing the automobile due to its own “hubris in adding far too much new technology to the Model X in version 1.”

It lacked enough in-house ability to manufacture some auto parts, the organization told. Yet, it produced 750 Model X vehicles weekly, by late March, which is approximately its full capacity. In addition, Tesla said it would maintain its forecasted figure between 80,000 and 90,000 EV deliveries in the upcoming year.

The sales of Tesla have been growing as it enters new auto markets and adds to its manufacturing capability. It delivered only over 50,000 automobiles last year. It revealed in the first quarter of the year that new orders surpassed the vehicles sold by a “wide margin”.

The report came days after the automaker began taking reservations for Model 3, a compact car with a 215-mile range on a single charge that provides seating to five people. According to Bloomberg, the mass-market car is also capable of running more than 215 miles on a single charge.

Through, March 2, 2016, the company had logged reservations of 276,000 units of Model 3, each reserved with a refundable deposit of $1000. The interest in Model 3 shows a robust demand for the company’s car that currently is inhibited by the costly price of its present offerings, which are offered at a starting price of $76,000 and often offered for over $100,000 with its options.

Reservations for the upcoming Model 3 lifted the shares to a 7-month high, reaching 4% at price of $246.99 at 4 p.m. On February 9, the organization’s share trading ended at $142.32. After the release of the sales report, its stock fell by 2.4% in trading done after the closure of the regular stock market on NASDAQ.

Sydney Morning Herald reported the company is challenged by rival automakers, which are ready to enter the EV market. It is facing supply-side problems. Washington Post claimed that it now looks to achieve what everyone has failed to achieve – deliver electric vehicles to the masses.

It could be said that by accepting its mistake, Tesla would be able to enhance its image in the competitive industry.

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Posted by on April 6, 2016 in Finance News, Tesla Motors

 

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