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Tesla tanks? And the chart doesn't show Thursday's preliminary decline.

Things to keep going from bad to worse for high-flying battery-car maker Tesla Motors – at least as far as the company’s investors are concerned, though many potential customers are in for a disappointment, as well.

The latest setback, it seems, is the result of the maker’s unexpected success winning over buyers in a market otherwise skeptical about electric propulsion. Tesla is taking so many orders it doesn’t have enough batteries to meet demand – news that once again sent its stock plunging.

Tesla stock has been in sharp decline for the past month – after reaching a $194.50 peak in late September it was trading around $140 a share mid-morning Thursday, a drop of around $11, or over 7%, for the day.  On Wednesday, TSLA, as the stock is traded as, fell so fast that, at one point, it triggered NASDAQ’s so-called “circuit-breaker,” which is designed to slow trading by short-sellers that could drag shares down even faster.

For most of the year, Tesla was one of the darlings of Wall Street, the stock surging about fivefold from its early January low as investors warmed to the idea that the California firm might actually make a go in the nascent electric vehicle market.  In fact, demand has been steadily growing all year, with volumes now 5,500 a month, according to Tesla.

(Tesla announces it’s in the black – sort of. Click Here for more on its Q3 earnings.)

The problem revealed by CEO Elon Musk during a conference call this week is that Tesla is running short of the batteries it needs to meet demand.  It has diverted some cars from U.S. showrooms to Europe where it is just launching a sales network.

Tesla recently signed a new deal to get more batteries from supplier Panasonic, but those won’t begin to flow into the carmaker’s California assembly plant until next year.

“Reality set in,” cautioned Barclay’s analyst Brian Johnson, who likened the way investors had been treating Tesla stock to “a high-reward lottery ticket.” As of Thursday morning, however, shares were settling in closer to Johnson’s target price of around $141 a share – which would still be a nearly fivefold increase from the maker’s 52-week low of $29.50.

(Tesla one of the hottest products in America’s wealthiest neighborhoods. Click Herefor the story.)

The shortage of batteries might actually have been seen as good news – suggesting Tesla has plenty of upside potential – if it weren’t for other nagging problems that have become increasingly apparent in recent weeks.

That includes two fires involving Tesla battery packs, one in the Seattle suburbs and the other in Mexico. While the design of the Model S battery car appeared to minimize damage – and even with Musk issuing plausible explanations that downplayed the possibility of vehicle design defects – the fires have worried investors.

So did Tesla’s third-quarter earnings, the maker declaring a $16 million net profit, though that figure was based on adjusted accounting procedures. Using more generally accepted guidelines, known as GAAP, Tesla would have sunk $38 million into the red.

(Hoping to tackle Tesla, Cadillac plans an assortment of battery vehicles. Click Herefor details.)

Though analysts caution it may be too early to tell whether there’ll be an impact from news of the two battery fires, preliminary indications suggest demand for the Model S has not slowed down. That’s all the more significant considering the overall slowdown in demand for battery-based vehicles, in recent months, as fuel prices have fallen.

That has at least some analysts and investors running counter to the latest gloom-and-doom mindset. Elaine Kwei, who follows Tesla as an analyst for Jeffries, issued a more upbeat assessment following Tesla’s earnings announcement. The company has made “remarkable progress,” and met “tremendous milestones” since the Model S was launched in July 2012, she wrote, confirming her view of Tesla stock as a “Buy.”

As shares continued plunging Thursday morning, however, it seems like investors weren’t listening.

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