Shares Inch Lower On Missed Delivery Expectations While 2016 Sales Up By 27%
Following Elon Musk’s huge New Years announcement on the updated autopilot features of 1000 users of their self-driving cars, Musk announced this Wednesday that Tesla’s gigafactory in Nevada is now operational.
The gigafactory which CEO musk have talked about since last year will be producing the batteries for their Model 3 unit.
The company’s gigafactory will now be also producing the Powerwall 2 and Powerpack 2 energy storage products at full speed where the production of the batteries for their Model 3 will start by next quarter.
The said gigafactory is a joint project between Tesla (NASDAQ:TSLA) and Japanese-electronics company Panasonic Corp. (T:6752). This will address the growing demand for batteries after the company received 400,000 orders for their Model 3 which will cost at around $35,000.
Tesla’s gigafactory is set to create around 20,000 to 30,000 new jobs in the area and will directly hire 6,500 people for the factory.
The mass production of the cells and batteries marks a record for Tesla as most batteries in the country’s manufacturing sector are being imported from Asian countries such as Japan and China.
Tesla’s 2016 Deliveries and Sales
Shares of American automobile maker Tesla recently declined on the information that overall deliveries of their vehicles dropped down what they have originally forecasted.
From an overall production of more than 80,000 cars from the company, only 76,230 units of cars and sports utility vehicles were reportedly sold throughout the whole 2016. Despite the weak sales, the company posted an increase in their sales for about 27% high.
80,000 vehicles was also expected by the company to be delivered in 2016 with 24,500 forecasted to be delivered this recent fourth quarter. Shares of the automobile maker then dropped after the company reported that only 22,500 vehicles were delivered this fourth quarter.
According to Tesla, the reason behind the lesser deliveries were due to their short-term production in their decision to transitioning to another autopilot hardware.
Tesla is also facing problems with the deliveries of some orders from Europe and Asia as some dealers have missed certain cutoffs for shipping. Some vehicles are also still under the process of being transported and is expected to be delivered this first quarter of 2017.
Despite these failed efforts to deliver all vehicle orders in time, Tesla’s production rate have jumped by 64% this 2016 compared to 2015.
Tesla shares were trading at around 1.5% higher during early Tuesday trading before shares dropped during the after-hours trading down by 2%. Demand for the vehicles of the company are still rising with orders specifically for their Model X and Model S soaring by 52% compared to 2015’s fourth quarter.
According to the company, car deliveries without the proper paperwork also did not make it to the actual number of deliveries.