Reports: Tesla Has Record Inventory Of Unsold Cars In China

Chinese media has compared Tesla Motors Inc (NASDAQ: TSLA) imports to its sales and concluded that the company has 2,301 unsold Model S cars in China, according to a report in CarNewsChina.com. The company sold 2,499 cars in 2014 compared to imports of 4,800 in 2014.

The reports say that Tesla's deposit structure caused cancellations. Initially, customers are charged a first $2,400 deposit to order the car and another $39,000 deposit when the car ships. The remaining $61,000 would be charged at delivery. However, many customers were canceling their orders before the second deposit, resulting in a glut of cars in China.

Since finding out, Tesla restructured its deposit scheme to charge a higher, $8,000 deposit up front. This has resulted in an "immediate drop in sales in late 2014 as potential buyers considered 50,000 yuan as far too much."

Tesla China reportedly suggested that Tesla discount cars by 20 percent or use large dealer groups to eliminate excess inventory. Tesla's headquarters rejected that plan. For now, the cars remain in China.

Shares of Tesla closed Friday at $188.68 and were up more than 2.5 percent in Monday's premarket.