Tesla Motors launched its all-electric Model S on June 22, delivering the first 10 cars to customers at its California headquarters. The company said it was on track to deliver 5,000 of the electric cars by the end of the year, but that seems increasingly unlikely. Tesla has not delivered any cars since June, the San Jose Mercury News reports.
Tesla says it has 12,200 people on its waiting list, meaning this year’s production run and a good portion of next year’s (Tesla says it will build 20,000 cars in 2013) have already been spoken for. So where are the customers’ cars?
“The production steps up in a geometric and exponential way,” Tesla CEO Elon Musk told analysts in a conference call, “the production ramp is this sharp S curve. In 2013 we’ll produce at least 20,000 units. That’s all that matters.”
Musk said the delays are due to his attention to detail. He personally inspects as many cars as he can, and he claims the delays are the fault of suppliers who don’t meet Tesla’s quality standards. Musk has sent interior trim and chromed door handles back because they did not satisfy him.
“There are these little things that are extremely annoying,” Musk told the analysts, “they are mostly interior, soft trim issues.”
Musk said Tesla has made a total of 40 production cars this year. In a letter to shareholders, the company said it will deliver 500 more cars in the third quarter, and the balance of the 5,000 scheduled cars in the fourth quarter. Tesla currently makes 10 cars per week, and will need to make 375 cars per week by October to meet its goal.
Meanwhile, Tesla’s losses continue to pile up. Despite the beginning of Model S production and a possible joint project with Mercedes-Benz, the company posted a $106 million loss in the second quarter of 2012, compared to $89.9 million in the previous quarter.
The Model S is supposed to break new ground for electric cars by focusing on luxury, style, and performance, as well as efficiency. A base model with a Tesla-quoted 160-mile range costs $57,400, while a top-spec model with an EPA-rated 265-mile range costs $105,400. The Model S qualifies for a $7,500 federal tax credit.
Tesla plans to sell the majority of its cars through retail stores in malls, instead of traditional dealerships. The first of these Apple Store-like outlets opened in White Plains, New York in June.
Everything about Tesla’s products and marketing is very clever, but it seems the company has gotten hung up on one of the fundamentals of the car business: actually making cars.