Energy

Tesla’s Angry Shareholders Probably Won’t Like This News

REUTERS/Lucas Jackson/File Photo -

Daily Caller News Foundation logo
Chris White Tech Reporter
Font Size:

Tesla Motors missed its quarterly delivery mark by more than 3,000 vehicles, potentially angering shareholders already concerned the company’s possible merger with solar panel producer SolarCity could be fraught with ethical improprieties.

Tesla’s deliveries were 15 percent less than forecast and were even lower than the first quarter of this year. Tesla manufactures cars after they are purchased. It sold 14,370 cars, down from the 17,000 it expected to sell, according to a letter sent to shareholders Sunday.

Worse still, the company managed to deliver only 14,820 vehicles, not the 16,000 vehicles it promised in the first quarter.

Tesla indicated it would not be able to produce the 80,000-90,000 vehicle deliveries for the year — the company justified the slowdown in production by suggesting it has had to focus on the production of the Model X, a sport utility vehicle.

Tesla attempted to reassure investors and shareholders, telling them the company will produce 79,200 vehicles, falling well short of the 90,000 it promised.

“Due to the extreme production ramp in Q2 and the high mix of customer-ordered vehicles still on trucks and ships at the end of the quarter, Tesla Q2 deliveries were lower than anticipated at 14,370 vehicles, consisting of 9,745 Model S and 4,625 Model X,” the company wrote in a statement Sunday, one day before the Fourth of July.

Tesla’s after hours weekend stock trading tumbled shortly after the announcement.

The company’s less than expected deliveries came on the heels of a particularly bad June for Tesla, which culminated in a proposal by Elon Musk to merge SolarCity and Tesla. Investors struck a note of concern at the time, claiming the company board of directors needed a shakeup.

One investor group, CtW Investor Group, said the market’s “hostile reaction” to the SolarCity deal was induced, in part, by the group’s recognition that Donald Kendall, chief executive of investment management firm Kenmont, is the only person on the SolarCity board without deep-rooted ties to Musk.

“This is particularly questionable when six out of our seven board members have ties to SolarCity,” a CtW letter to Tesla noted. “This raises a serious question about whose interests the board is serving — the stockholders of Tesla or the stockholders of SolarCity.”

The group, which holds 200,000 shares of Tesla, demanded Tesla SolarCity shakeup its directors after discovering that six out of seven board members with the solar panel company have direct connections with Elon Musk, the CEO and chairman of both companies.

The company announced Thursday a full federal investigation into technology in its vehicles after a man died in a wreck while using the self-driven function in his Model S.

Follow Chris on Facebook and Twitter

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.