As Tesla Motors Inc (NASDAQ:TSLA) crows about its success in China, as recently reported in ValueWalk, is it really masking a larger problem? Could the “meet expectations” game so many stocks play be running out of rope at the electric automotive firm?

Tesla Motors TSLA

Tesla Deliveries

Writing on the blog Seeking Alpha, Paulo Santos, an algorithmic trader who likes to consider relative value numbers, thinks the relative value of Tesla’s delivery expectations might be coming to an adjustment period.

The expectations game is played differently by different participants. Ideally, the top rung of the game, is to control the identification of internal metrics that guide Wall Street’s expectations.  If a company can determine the measures by which it is judged it can select those it can most easily control or influence to the upside.  Once the expectation benchmark has been set, then the goal is to constantly beat.  This game is best played by high-flying tech stocks who aren’t often measured by pesky little statistical measures such as price / earnings multiples based on the hear and now.

Such appears to be the case with Tesla.

Tesla’s benchmark is automotive deliveries and a game is being played, Santos says. “Tesla has thus been playing this game where each quarter the backlog of an existing country allows it to meet or beat its own deliveries guidance (which stands at 7,500 vehicles for Q2 2014),” Santos writes.

Santos points out deliveries can be dependent on the individual countries in which it enters.  Santos notes Norway as an example, where there were 536 vehicles sold in June. “This is obviously a massive drop from the 1493 shipped in March and which allowed Tesla to meet/beat its Q1 2014 delivery guidance.”

What he didn’t say is that each country might have pent up demand, thus once the initial launch of the automobile in the country might bring out the adventuresome set that lives on the edge in most societies, this does not mean a trend has been started – only that those in society who have the financial means and want to live on the edge of a new apparent trend are willing to step in the ring. Thus, initial demand in each country may be a fat tail distribution, where an early boom in sales may be followed by a longer adoption period.

Santos notes the next two quarters have much higher implied delivery expectations, “with H1 2014 having had deliveries of 13,957 Model S cars, H2 2014 needs to see 21,043 deliveries to meet the 35,000 yearly guidance. This means deliveries have to jump from the current 7,500 to around 10,500 per quarter.”

Santos says that each quarter is being fed by existing backlog from some countries, and the electric car company might have difficulty meeting the need to increase deliveries. “There’s still Japan and the U.K. to feed, but at this point these don’t seem like major markets,” he writes.

Santos concludes it might be time to consider revising expectations for Tesla.

Applying normalized value metrics to the stock might be a good place to start.