Tesla has an unsold inventory of 2,301 Model S cars in China, according to local media reports citing sources from within the company. The automaker reportedly imported 4,800 cars in 2014 and sold 2,499 units, which amounts to sales of around 208 cars per month.

Order cancellation is one of the reasons for the huge inventory. Following the launch of P85D in October 2014, many customers cancelled their order for Model S and opted for the D instead. However, by then the originally ordered cars had already been shipped, CarNewsChina.com reported.

For car bookings, the company uses a two-phase deposit system in China. While ordering the car, the customer has to pay CNY15,000 (US$2,394), and another CNY250,000 when the vehicle is ready to be sent to China. However, only the first deposit was collected, and collection of the second deposit was "too difficult", a company source said, leading to a lot of cancellations.

In order to discourage cancellations, Tesla increased the first deposit amount to CNY50,000. This increase resulted in a fall in sales in late 2014, and the company sold only 120 cars in January 2015.

Another reason for the inventory pile-up is that cars were ordered for new stores, which were supposed to open in the country, but did not.

Of the 2,301 cars in the inventory, around 170 to 200 are stored in a warehouse, owned by Mercedes-Benz dealer Lei Xingxing Automobile, in Beijing. Most of the cars are parked near the company's Pudong District store in Shanghai and at the Port of Tianjin, it is reported.

Earlier this month it was reported that Tesla could be cutting up to half of the workforce at its Chinese distribution company's operations.