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Why Tesla Missed Its 2016 Goal for Deliveries

Tesla Opens Flagship San Francisco StoreTesla Opens Flagship San Francisco Store
A Tesla showroom in San Francisco.Photograph by David Paul Morris—Bloomberg via Getty Images
Tesla delivered 76,230 electric vehicles in 2016, falling just short of its year-end goal of 80,000 due to a few logistical challenges compounded by earlier delays in production, the company reported Tuesday.
Tesla did say however that it met its production goal. The Palo Alto, Calf.-based company produced 24,882 vehicles in the fourth quarter and 83,922 vehicles total in 2016, a 64% increase from the previous year.
Delays caused by its transition to its new automated driving hardware known as Autopilot pushed production towards the end of the quarter, the company says.
“The delay in production resulted in challenges that impacted quarterly deliveries, including, among other things, cars missing shipping cutoffs for Europe and Asia,” according to a Tesla release. “Although we tried to recover these deliveries and expedite others by the end of the quarter, time ran out before we could deliver all customer cars.”
The delivery shortfall caused Tesla shares to fall about 2% in after-hours trading.
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Tesla says it delivered about 22,200 vehicles in the fourth quarter. Deliveries are counted once the customer has received the vehicle and all paperwork is correct. In total, about 2,750 vehicles missed being counted as deliveries in the fourth quarter due to last-minute delays in transport or because the customer was unable to physically take delivery, Tesla says.
Despite the shortfall, Tesla notes that vehicle demand remained strong through the end of the year. Net orders for the Model S and X were 52% higher in the fourth quarter than in the same period last year and 24% more than the third quarter in 2016.
Record deliveries in the third quarter, which skyrocketed 70% to 24,500 cars, caused revenue to more than double to $2.3 billion. The boom not only helped Tesla offset the capital intensive rollout of its upcoming Model 3 sedan, it also led to a profitable quarter.
The company posted a profit of $21.9 million for the third quarter ended Sept. 30, compared with a loss of $229.9 million a year earlier.