The good news: Tesla production was up 20% the last quarter from the previous quarter.

The bad news: Tesla fell short of their second quarter production goals by more than 8%.

Tesla's production goal for the quarter was 20,000 vehicles but they only managed to produce 18,345 cars, about 2/3 Model S and the rest of the Model X. At 9,745 it's the lowest deliveries the Model S has seen since the first half of 2014, but with an increasing portion of sales going to the more expensive Model X we doubt Tesla's too disappointed.

Deliveries were even lower, with 14,370 delivered (again 2/3 Model S and 1/3 Model X). Tesla says the lower deliveries were the fault of vehicles in transit during the quarter, which Tesla counted as 5,150 at the end of the quarter (nearly twice as many as at the end of the previous quarter). Tesla deliveries have declined for the second quarter in a row, peaking at the end of 2015 at 17,400 vehicles.

Tesla faults a steep production ramp, with "almost half of the quarter's production" occuring in the last four weeks of the quarter. Tesla now "expects to produce and deliver about 50,000 vehicles" during the rest of the year, which would put the company on track for meeting the lower end of their 80,000-90,000 estimate for 2016.

The troubles meeting production demands for current Tesla vehicles only continue to demonstrate the struggles that Tesla will face going forward with the Model 3 sedan. They've received nearly 400,000 reservations for the $35,000 electric sedan and expect to start production for it in late 2017. Tesla's 2018 production goal is for a total of 500,00 vehicles — a hugely ambitious increase from their current production rate.

PALO ALTO, CA -- (Marketwired) -- 07/03/16 -- Tesla (NASDAQ: TSLA) produced 18,345 vehicles in Q2, an increase of 20% from Q1, and exited the quarter consistently producing just under 2,000 vehicles per week. Due to the steep production ramp, almost half of the quarter's production occurred in the final four weeks.

With continued productivity improvements, Tesla expects output to reach 2,200 vehicles per week in Q3 and 2,400 vehicles per week in Q4. Current order rate trends and backlog support production at those levels. In total, Tesla expects to produce and deliver about 50,000 vehicles during the second half of 2016, approximately equal to all of 2015.

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. In total, 5,150 customer-ordered vehicles were still in transit at the end of the quarter and will be delivered in early Q3. That amount was higher than expected (there were 2,615 vehicles in transit to customers at the end of Q1) and is more than a third of the number of cars that completed delivery in Q2.