Skip to navigationSkip to content

Tesla’s solution to its woes in China: better seats

Tesla-Model 3-India
Reuters/Lucy Nicholson
A look under the hood.
Published This article is more than 2 years old.

The numbers: Tesla reported a fourth-quarter loss of $108 million on revenue of $957 million, and delivered 9,834 vehicles during the quarter. (Stifel Nicholas analyst James Albertine was looking for deliveries of 9,929 vehicles.)  The electric car maker said it expects to deliver 55,000 Model S sedans and Model X SUVs this year, an increase of about 70%.  Shares are whipsawing around in after-hours trading, but are down by about 3% at the time of writing.

The takeaway:  Tesla is in a bit of a rough patch in China at the moment. According to press reports, Musk is considering firing executives in the country after Tesla sold only 120 vehicles in the country last month. There was no mention of this in Tesla’s letter to shareholders, but the company said it remains committed to the fast growing market. It even thinks it might have a fix for its problems there.

Despite initial challenges in China, we remain convinced of the vast potential of this market and are concentrating our efforts on the cities we are in currently, before launching into new cities. We now offer a turn-by-turn navigation option in China that we provided retroactively through a remote software upgrade to all our customers with appropriately optioned cars, and we believe our new executive seats and second row center console will be quite popular with new China customers. [Emphasis ours.]

What’s interesting: The miss on deliveries is partially explained by Elon Musk’s perfectionism. In his letter to shareholders, Musk explained that it required “a herculean effort” for the company to hit its 2014 production target of 35,000 vehicles,  because it held back the release of its souped-up Model S “to ensure it would be a truly great experience for owners.” While the production goal was met, not all those cars were delivered “due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships).”

📬 Kick off each morning with coffee and the Daily Brief (BYO coffee).

By providing your email, you agree to the Quartz Privacy Policy.