2016 Tesla Model X Deliveries Hit Speed Bump Due to "Hubris," Parts Shortages | Edmunds

2016 Tesla Model X Deliveries Hit Speed Bump Due to "Hubris," Parts Shortages


PALO ALTO, California — Customer deliveries of the 2016 Tesla Model X SUV were significantly delayed in the first quarter due to severe supplier parts shortages and Tesla's "hubris," the automaker said on Monday.

Tesla's first quarter deliveries consisted of 12,420 Model S sedans and 2,400 Model X SUVs, Tesla said in a statement.

It had predicted a delivery of approximately 16,000 vehicles in the first quarter of 2016 in its 2015 year-end forecast.

Tesla said the disappointing first quarter 2016 delivery count had several "root causes."

They include "Tesla's hubris in adding far too much technology to the Model X in version 1, insufficient supplier capability validation and Tesla not having broad enough internal capability to manufacture the parts in-house," the company said.

Tesla said the delivery count was hit by "severe Model X supplier parts shortages in January and February that lasted much longer than initially expected. Once these issues were resolved, production and delivery rates improved dramatically."

The Model X features dramatic gullwing doors. Tesla did not say which parts were in limited supply.

By the last full week of March, the build rate rose to 750 Model X vehicles per week. Tesla said it remains on track to deliver 80,000 to 90,000 vehicles in 2016.

Key competitors to the Model X include the BMW X6, Land Rover Range Rover Sport and Porsche Cayenne. The Model X is on sale now at Tesla stores.

The delivery glitches will not be repeated when the 2017 Model 3 sedan launches late next year, Tesla said.

"Tesla is addressing all three root causes to ensure that these mistakes are not repeated with the Model 3 launch," the company said.

Orders for the highly anticipated Model 3 hit 276,000 on Saturday, just three days after the car was introduced.

Jessica Caldwell, Edmunds.com director of industry analysis, says the debut of the Model 3 is evidence that "Tesla is primed to make the leap to mainstream car buyers."

But she warned: "To be a full-fledged car company, Tesla needs to build volume and it needs to do it sooner rather than later."

Edmunds says: Something of a reality check for Tesla after the giddiness of the Model 3 introduction.

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