Tesla on Monday reported vehicle deliveries for the second quarter that were lighter than expected: 22,000 in total — versus the first quarter's record of 25,000 — thanks to challenges with the largest battery pack for the all-electric cars.
Just over 12,000 of the cars delivered were Model S, and over 10,000 were Model X, the carmaker said.
That was a 53% increase over the same quarter in 2016, bringing the yearly tally through June to 47,100 — slightly off the pace of 50,000 that many Tesla observers and analysts had expected.
"The major factor affecting Tesla's Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines," the company said.
Tesla said production was off by 40% but that the issues related to the delay had resolved.
Vehicle production for the quarter was 25,708 vehicles, and for the first half of 2017, it was 51,126 vehicles. CEO Elon Musk hopes to see Tesla building 500,000 vehicles annually by 2018.
In its statement, Tesla said it expected deliveries in the second half of 2017 to beat those in the first half.
The weaker quarter could be a positive indication that Tesla is also focused on preparing to launch the Model 3, a $35,000 vehicle set to go into production in July.
The problem with the 100-kilowatt-hour battery packs is also a sign that Tesla's most expensive vehicles could be in high demand, meaning the carmaker could post solid revenue for the quarter.
Tesla also addressed a question about its Model X SUV.
"We also finally added a sufficient number of Model X cars to our test drive and display fleet because our stores had been operating with far short of what was needed and, in some cases, none at all," the company said. "There appears to be substantial untapped sales potential for Model X. It should also be noted that production quality and field reliability of the Model X, for which Tesla has been fairly criticized, have improved dramatically. It is now rare for a newly produced Model X to have initial quality problems."
The Model X was launched in late 2015 and endured a fraught rollout, creating what Musk at one point called "production hell" in 2016. There's been speculation that demand for both the Model S and the Model X is flattening ahead of the Model 3 launch. But until significant Model 3 production arrives, Tesla would prefer customers consider an S or an X.
Tesla shares were down about 2.5%, to $353, in a shortened trading day on Monday. The stock has been on an epic run since the beginning of the year, up over 60% so far in 2017.
