Tesla delivered 22,000 vehicles in the second quarter of 2017, bringing its total deliveries for the first half of the year to 47,100. That’s the low end of its original estimate for the first half of this year.
The stock seesawed in early trading, falling 2.5 percent after the company released its delivery numbers and erasing an earlier spike on a late Sunday announcement Tesla would begin delivering the Model 3, its first mass-market vehicle, by the end of July.
Last quarter, the company delivered a record of 25,000 cars and aimed to nearly double that number by the end of the quarter and ship between 47,000 and 50,000 cars. The company attributed delivery issues to shortfalls with battery production, which fell 40 percent below needed production levels.
“The major factor affecting Tesla's Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines,” the company wrote in a statement. “The technology challenge grows exponentially with energy density.”
CEO Elon Musk often sets ambitious production targets, but the company has previously missed many of those deadlines. The company faces a new challenge in producing the Model 3. Reservations for the car have reached 300,000.
Tesla has an aggressive timeline for ramping up production of its Model 3, from 100 cars a month starting in August to about 20,000 a month by December.
Model 3 passed all regulatory requirements for production two weeks ahead of schedule. Expecting to complete SN1 on Friday— Elon Musk (@elonmusk) July 3, 2017
Tesla is aiming to deliver more vehicles in the second half of the year than it did in the first half and 500,000 cars a year by the end of 2018. To that end, the company has plans to build at least three more battery factories later this year.
Handover party for first 30 customer Model 3's on the 28th! Production grows exponentially, so Aug should be 100 cars and Sept above 1500.— Elon Musk (@elonmusk) July 3, 2017
This article originally appeared on Recode.net.