Tesla Motors has indicted that it delivered 17,400 vehicles in the fourth quarter of 2015, nearly 50 percent more than the 11,627 vehicles delivered at this same period a year ago. Yet, the bloom is somewhat off the rose when considering certain Tesla customers delivery expectations.
Tesla reportedly met its internal goal to deliver more than 50,000 total vehicles in 2015. However, customers who made deposits as far back as three years ago to secure the new Model X SUV remain disappointed. That model has undergone a series of repeated delays.
According to published reports, customers who made $40,000 deposits in 2013 to insure they would be the first to secure the Model X are growing increasingly frustrated. After missing its initial availability date of 2013, the Model X was finally released for deliveries in September of 2015
Since the September release, Tesla has delivered only 208 Model X’s to paying customers vs. the more than 20,000 reservations logged worldwide according to an unofficial tally from a Tesla fan group. In its reporting, The Wall Street Journal indicated that Tesla initially delivered the long-awaited SUV to executives and important investors, and then to “Signature” reservation holders who placed deposits in the winter of 2012.
Tesla itself indicates that production rates for the Model X have now increased to 238 SUV’s per week. At that rate, it will be upwards of two years just to deliver vehicles to reservation customers without additional boosts in production.
Tesla’s founder Elon Musk has characterized the Model X as “The hardest car to build in the world.” That could be interpreted to mean the most sophisticated engineered vehicle but not necessarily one designed for higher volume manufacturing. Its falcon wing doors and air filtering system are examples of engineering accomplishments but call into question needs related to design for higher volume manufacturing. Luxury seat manufacturing was recently moved from a supplier, in-house to Tesla’s production facilities because of quality and volume needs.
The phenomenon of Tesla is one where customers are more than willing to pay more than $100,000 to secure a luxury premium, electrically powered automobile. Its brand is powerful among affluent buyers. However, Tesla’s longer-term financial success stems from its abilities to provide automobiles to broader categories of buyers.
Manufacturers with a pronounced engineering-driven culture are sometimes challenged with the needs for what is termed “design for supply chain”, where common design and components can be leveraged among multiple product types and where consistency in quality can be maintained. Many global auto manufacturers have struggled to achieve these concepts.
Make no mistake, Tesla’s product designs are extraordinary and have broken new ground in engineering, performance and elegance. That same energy and resolve must continue to be directed at the company’s abilities to sustain higher levels of volume manufacturing and a globally extended supply chain.
Then again, if you currently own a Tesla, rest assured your investment was a good one, since global product demand remains unfulfilled.