Despite reports of a strong quarter, the rowing back of production outlook for Tesla’s electric cars has led to share prices falling. Q3 saw the electric car producer churning out just over 12,000 vehicles, a 60% increase from a year ago and deliver around the same number as in Q2. Despite this, the company has adjusted its full-year forecast for vehicle sales stating it aims to deliver 50,000 to 55,000 vehicles, adding a lower range now to the previous forecast of 55,000.
Tesla’s CEO Elon Musk says,”While our equipment installation and final testing of Model X is going well, there are many dependencies that could influence our Q4 production and deliveries. We are still testing the ability of many suppliers to deliver high quality production parts in quantities sufficient to meet our planned production ramp. Since production ramps rapidly late in Q4, a one-week push out of this ramp due to an issue at even a single supplier could reduce Model X production by approximately 800 units for the quarter”.
Storage demand soars
Meanwhile Tesla’s storage solutions arm Tesla Energy has seen a surge in demand for its storage solutions. Musk has revealed that more than 100,000 reservations have come in for the rechargeable lithium-ion batteries. This could translate to sales of more than $1 billion. Tesla plans to ramp up, produce and sell $40 to $50 million worth of batteries in Q4 according to Forbes.
The plan for 2016 is to produce ten times more and 2017 sales should be another five to ten times more according to Musk. 70% of the demand has come for the commercial and industrial scale Powerpack and the remaining 30% for residential Powerwall.
In its financial report Tesla states that the company is on track to start production of Tesla Energy products this quarter in its Fremont factory and ramp up production by Q4. Consequently Tesla expects its Q3 services and other revenue to “grow modestly and gross margin to be comparable to Q2”. The battery module and pack production is expected to be expanded at the Gigafactory in Fremont in Q1 2016 on a more automated line.