Tesla Shares Sell Off Amid Investor Concern Of 'Massive Discounts

Tesla Motors Inc.'s

discounts could leave the company bleeding on the bottom line, according to a report filed by Seeking Alpha. Analysts, on average, currently estimate a loss of $0.95 per share for the year, which according to the report is a new low.

Tesla apparently has flooded the market with several hundred Model S inventory units, with current levels nearly double that of the previous high. This brings into play the simple demand-supply equation, which forebodes a hit to pricing, as supply outpaces demand.

Tesla, according to Seeking Alpha, might want to meet delivery targets, giving a nice boost to the shares ahead of the proposed Q4 capital raising program. The shares of the company has lost a little over 4 percent thus far this quarter compared to the record performance by the Nasdaq Composite Index. Thus, the attempt to do a makeover for the shares looks logical? However, has it backfired?'

Seeking Alpha stated that the company is discounting every vehicle of the 75 kWh version, with the discounts ranging between $6,000 and $8,000. Essentially, the pricing of this version is now pitched on the same lines as the 60 kWh versions, thus offering customers a free range upgrade. The report also noted that the Model X is discounted as well. However, the move to discount even newer models, the production of which are just ramping up and overseas shipments happening only recently, doesn't make sense. This, according to the article, has rendered the company's production-constrained strategy under cloud. Following the press reports of the discounts, Telsa shares are weaker and at last check, the stock was down 0.64 percent at $203.90.