The complexity of Tesla Motor’s yet-to-be-released battery electric SUV, the Model X, is leading to challenges at the factory and is slowing down production of the Model S sedan.
After already undergoing a series of delays, the highly anticipated Model X is set to be released in September or October. Though Tesla CEO Elon Musk hasn’t officially pushed this date back, he did say there are complications with building the vehicle.
“The Model X is a particularly challenging car to build, maybe the hardest car to build in the world. But it is an amazing vehicle and I think it will blow people away,” Musk said on Thursday during a call with analysts.
“Our biggest challenges are with the second-row seat,” he explained. “It’s an amazing seat, a sculptural work of art, but a very tricky thing to get right.”
For Tesla, build quality is more important than sales numbers.
“Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former. To build long-term value, our first priority always has been, and still is, to deliver great cars,” said Musk and Chief Financial Officer Deepak Ahuja in a letter to shareholders.
Because the Model S, Tesla’s battery electric sedan, and the Model X are built on the same assembly line, any delays with one affects production of the other. With this in mind, Tesla is cutting production estimates for both 2015 and 2016.
“We are now targeting deliveries of between 50,000 and 55,000 Model S and Model X cars in 2015,” Musk and Ahuja said.
This softens projections somewhat from the original goal of 55,000 total vehicles. Just over halfway through the year, it’s difficult to see where Tesla sales are. According to Automotive News, Tesla delivered 21,577 worldwide in the first six months of 2015. Over the same period, the HybridCars.com dashboard calculated 11,900 Tesla U.S. sales.
Even though 2015 sales aren’t yet matching up with Tesla’s projections, they are already stronger than last year’s totals. At the end of last month, the Model S posted 13,700 sales for the year. The carmaker didn’t top 13,000 sales last year until October, and had only 31,655 global sales for 2014.
Tesla also noted that a recent shift in its approach has improved sales in China.
“In Asia, [second quarter] Model S orders nearly doubled from last quarter, helped by the initial success of our revised China strategy,” wrote Musk and Ahuja.
“Musk also reset expectations on 2016 production, saying that Tesla expects to produce an average 1,600 to 1,800 vehicles a week at its plant in Fremont, California, allowing for holidays and necessary downtime to retool,” reported Automotive News. “Previously Tesla had projected a weekly run rate of 2,000 cars and SUVs.”
This drops the production forecast for 2016 from 104,000 down to about 88,400.