Tesla's full year results fail to meet expectations, with deliveries down due to delays

 
Sarah Spickernell
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Some deliveries had to take place in January this year (Source: Getty)
Tesla's full year results are likely to reverse investor confidence.

The figures

During the three months to 31 December 2014, Tesla Motors delivered 9,834 cars to clients – lower than the 11,200 deliveries analysts hoped for and expected.
Similarly, the 31,655 cars delivered during the full year to 31 December failed to meet the expected 33,000. Still, the number was an increase on the 22,500 deliveries in 2013.
When it comes to the long-awaited Model X vehicle, Tesla said it entered 2015 with 20,000 reservations, but still none of these have turned into actual deliveries. Shipping of the product is due to begin in six months, according to the latest update.
The luxury car manufacturer said the main cause of the worse-than-expected results was production delays, which forced some deliveries to take place in January this year instead.
That was not all, however. In a statement released this evening, the company said:
“While we were able to recover the lost production by end of the quarter, delivering those cars was physically impossible due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships).”

Why it's interesting

The fact that Tesla was unable to meet its estimated 33,000 deliveries seems even worse when you consider that it had already been brought down from 35,000 in November. At the time it blamed it on a shortfall in production during the third quarter, which resulted in fewer cars being available for delivery by the end of the year.
Carter Driscoll, senior analyst at boutique investment bank MLV & Co., told Fortune that as long as as the delivery numbers came in at around 32,000, it should be viewed as positive. If they came in at 31,000 or below, the stock would react negatively. The fact that they came in somewhere in between makes it hard to judge the response, but it certainly doesn't look like it will be too positive.
The longer wait for Model X vehicle purchasers will send a negative message about the company's near prospects, too – originally, the first deliveries of the falcon-winged vehicles were planned for early 2014. The company has pushed back the delivery date several times in the past year.
It has been a troubling few months for Tesla in terms of Asian markets, too – last month, chief executive's Elon Musk admitted that things weren't going so well for the business in China. At the International Auto Show in Detroit, he said sales there had been weaker than expected in part due to misconception that charging is difficult in China. “There are communications issues we need to fix,” he said to the audience.
All of this has worked against Tesla in terms of its share price – since the start of 2015, shares have been some way off 2014 peak of $291 (£191).

What Tesla said

In a statement released by Musk this evening, he said the market problems experienced in China so far had not diminished his long-term confidence in the region:
Despite initial challenges in China, we remain convinced of the vast potential of this market and are concentrating our efforts on the cities we are in currently, before launching into new cities. Our China initiatives include simplifying the buying process there by having Tesla personnel install charging points at customer homes or businesses well before vehicle delivery.
He also remained optimistic about the year ahead for Tesla, predicting that vehicle deliveries will grow by 70 per cent over the course of 2015.

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