Tesla shipments move closer to 2016 target

SAN FRANCISCO • Tesla Motors Inc. delivered 24,500 vehicles in the third quarter, assuring investors that it will meet its 2016 targets ahead of a crucial plan to raise more capital this year.

The maker of electric cars and energy storage devices shipped about 15,800 Model S sedan sand 8,700 Model X sport-utility vehicles, Tesla said in a statement Sunday.

The third quarter was Tesla’s last chance to show it can be profitable before it raises money to ramp up production of the new Model 3. Chief executive Elon Musk urged employees in an Aug. 29 email to work on “building and delivering every car we possibly can.” The company has been taking more aggressive measures to keep sales of the ModelS and Model X strong while it awaits the smaller, less-expensive Model 3, which isn’t slated to begin volume output until late next year.

“Our Q3 delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct,” the company said. It reiterated that it expected to deliver 50,000 vehicles in the second half.

Tesla introduced a 60 -kilowatt-hour Model S in June that starts at US$66,000 before federal or state incentives. In August, the automaker added a 100-kilowatt-hour battery option with additional range. The Palo Alto, California-based company also announced a two-year lease on orders placed by Sept. 12.

Brad Erickson, a Pacific Crest Securities analyst with a neutral rating on Tesla, had estimated third-quarter deliveries at 22,000. In a Sept. 27 note, he said Tesla’s U.S. sales centres were using a deeper discounting formula to boost third-quarter sales through last Friday, the final day of the quarter. Musk fired off an email to employees the following day reminding them not to stray from Tesla’s pricing policies.

Tesla is increasing production at its Fremont, Calif., factory with an eye toward making 500,000 cars a year by 2018, a goal that also depends on the company’s battery factory east of Reno, Nevada, coming online with batter y-cell production. Both efforts will require more funding in the fourth quarter, Musk has said.

The third-quarter deliveries figure is a preliminary number that may change slightly in November when the company reports earnings for the period. Tesla counts a vehicle as delivered if it’s transferred to the buyer and all paperwork is correct. The automaker releases global sales figures quarterly, instead of the monthly country-by-country results typically announced by other automakers.

(WORK ON) BUILDING AND DELIVERING EVERY CAR WE POSSIBLY CAN.