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Tesla Motors Falls Short Of Goal To Deliver 80,000 Vehicles In 2016: Will It Be Able To Keep Up With Model 3 Demand?

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Tesla Motors had a goal of delivering 80,000 of its vehicles to customers in 2016. However, the electric car company fell short of its target, as it was only able to deliver 76,230 units for the year.

There are several factors that led to Tesla Motors missing its delivery target, but all eyes are now on the company on whether it will be able to keep up with the demand for its upcoming Model 3 entry-level electric sedan.

Tesla Motors Q4 And Full-Year 2016 Performance

For the fourth quarter, the deliveries of Tesla Motors actually increased by 27 percent, going from 17,478 electric vehicles delivered in the fourth quarter of 2015 to 22,200 vehicles delivered in the recently concluded quarter.

The delivery figure, however, is nearly 3,000 less than the 25,000 units projected for the period, with the posted growth not enough to break through the company's goal of delivering 80,000 units for 2016.

Tesla Motors, however, only counts a delivery upon the receipt of the owner of the electric car. The company said that, for the fourth quarter of 2016, around 2,750 vehicles were not counted as deliveries because of last-minute transportation delays or customers not being able to physically receive the deliveries. If these electric vehicles were to be counted, Tesla Motors would have come just a shade under its goal of 80,000 vehicles delivered in 2016.

Tesla Motors added that a bigger number of 6,450 vehicles are actually in transit, which would have pushed the company over its goal. However, these deliveries, once completed, will already be counted toward the company's performance for the first quarter of 2017.

The company, however, was able to improve on its production rate, with 24,882 vehicles manufactured in the last quarter of 2016 and 83,922 vehicles manufactured over the full year, which is good for a 64 percent increase compared with 2015's production numbers.

Reasons For Tesla Motors Delivery Shortfall

Despite record orders for the fourth quarter, Tesla Motors was not able to manufacture electric vehicles fast enough due to the delays caused by the introduction of new hardware in its cars for an improved Autopilot, and eventually, completely autonomous driving.

In October, Tesla Motors announced that all the electric vehicles that the company will build from then on will come with an upgraded suite of hardware for Autopilot that would eventually allow the cars to become fully autonomous vehicles in the future once the necessary software is ready.

Will Tesla Motors Be Ready For Model 3 Demand?

The Tesla Model 3, the company's first mass-market model, has already been reserved by more than 400,000 customers since the electric vehicle was announced in early 2016.

Production for the Model 3 is expected to begin near the end of this year, with delivery dates now being pushed back into 2018.

Tesla Motors CEO previously said that the company is looking to manufacture 500,000 cars a year by the end of 2018. With Tesla Motors not yet even able to reach its goal of delivering 80,000 vehicles for 2016, it being able to fill the demand for the Model 3, in addition to meeting orders for its other models, looks like a tall order.

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