The first quarter is nearly at an end, and Tesla Motors Inc. (NASDAQ: TSLA) executives already know how many cars the company sold over the period, or they are very close to final numbers. Tesla management said in their letter about the fourth quarter of last year that the company would sell 16,000 in the current quarter. Whether that happens will be as important to Tesla’s share price in the early part of 2016 as any other factor.
The 16,000 is a key to the company’s full-year goal:
To achieve these goals we plan to deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016, representing accelerating growth over 2015 at the midpoint of the range. We expect our average vehicle transaction price to increase slightly during 2016, as Model X grows to become a larger share of our deliveries throughout the year. In Q1, we plan to grow deliveries 60% year on year to approximately 16,000 vehicles, and we plan to directly lease about the same percentage of cars as we did in Q4.
The hurdles get higher by the day. The first is of Tesla’s own making. It has slowed production in the past, ostensibly to keep quality high, the company’s management says. And its factory operations may be too slow for the time being. Either could cause Tesla to miss the 16,000 goal.
Higher still are the efforts by almost every car company in the world, particularly the manufacturers of luxury vehicles, to take Tesla’s momentum away by producing their own all-electric cars. BMW, for example, is creeping closer with its i8 (which still has a small non-electric motor). Given the hundreds of millions of dollars these companies have for research and development, product development and marketing, one or two all-electric models could eat into Tesla’s market share quickly.
The 16,000 goal seems small by car industry measures, but Tesla could miss it.