Tesla U.S. June Deliveries of Model S Plunged 37% from 2016

Elon Musk (Haiko Jumne / AFP / Getty)
Haiko Jumne / AFP / Getty

Tesla’s $57-per-share stock crash this week, after the company announced good news for the launch of its Model 3, seems even more justified with the release of Tesla’s poor June U.S. sales figures.

The figures reveal that flagship Model S luxury sedan deliveries were down 37 percent from June 2016, and down 12.5 percent from June 2015.

Breitbart News reported on July 3 that Elon Musk tweeted that Tesla’s first mass-market-vehicle had completed all National Transportation Safety Board qualifications, and a “handover party” would be held on July 28 to make 30 initial Model 3 customer deliveries. Musk stated that Tesla’s Model 3 weekly production would ramp up to “20,000 Model 3 cars per month in Dec.” Musk also stated that Tesla is on track to meet its projected 80,000 deliveries in 2017 and 500,000 in 2018.

That should have been great news because Tesla has been losing about $30,000 on every car it produces, has never met a production schedule, and was only profitable in one quarter due to booking larger-than-normal government subsidies.

But the stock crashed because critics, who are closely watching Model 3 parts deliveries, estimate that Tesla’s weekly production of Model 3’ss would hit 30 in July; 250 in August; 1,000 in September; 1,875 in October; 3,250 in November; and 5,000 in December. That works out to delivering about 45,800 vehicles, or about half Tesla’s 80,000-unit projection.

The critics had assumed that Tesla’s June deliveries of its $100,000 Model S sedans and $140,000 Model X SUVs would rise by 20 percent over the prior year. But the authoritative Inside EVs blog reported that Tesla’s Model S domestic deliveries for June plunged to 2,300 for 2017 — down from 3,700 for June 2016 and 2,800 for June 2015. Inside EVs reported that Tesla’s Model X (which did not begin deliveries until late 2015) had June domestic deliveries of 2,200 for 2017, versus 2,145 for 2016.

Tesla has been delivering about the same number of foreign units per month as domestic units, so it could make a conceivable recovery of part of the delivery shortfall when the foreign numbers are reported around mid-month.

Musk told shareholders on May 31 that Tesla engineers can increase production by 1,100 percent by employing “physics-first-principles” to shape a new mode of industrial production that is “10 or even 100 times” more efficient than Detroit.

Musk emphasized that the key advantage to increasing productivity for Tesla is limiting the number of moving parts in an electric motor to 20m versus up to 10,000 parts for an internal combustion engine. But Breitbart News reported 18 months ago that two-thirds of Tesla’s electric motor drivetrains fail, and have to be replaced before vehicles reach 60,000 miles, according to Green Car Reports. Some Tesla owners have reported multiple replacements of drivetrains.

Breitbart also reported in March that Tesla was being slammed by lawsuits from employees that complaining about racial discrimination and sexual harassment.

Dewitt Lambert filed suit claiming that he was continuously harassed in 2015 and 2016 by assembly-line supervisors and co-workers with a torrent of racial epithets, talk about the size of his penis, and an employee shoving a drill gun into his rear end. Lambert claims that despite the maltreatment, he was still expected to work 12-hour shifts for six days per week.

AJ Vandermeyden, one of the only female Tesla engineers, filed a lawsuit in February and did interviews with the UK Guardian about alleged pervasive sexual harassment and discrimination. Ms. Vandemeyden attended Tesla’s diversity town hall on March 8, where numerous women complained about being discriminated against and harassed regarding wages, promotions, working conditions and too much overtime. Ms. Vandemeyden told the Guardian that the outpouring confirmed her complaint, and that Tesla then fired her for falsely alleging pervasive harassment against women.

None of this would seem helpful at increasing productivity by 1,100 percent. Breitbart News reported that the 10,000 employees at Tesla’s Fremont, California, facility are only producing an average of 12 vehicles per employee, per year. That compares to an average of 74 when GM and Toyota managed the same plant two decades earlier.



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