When the markets open on Wednesday morning, indications are pretty clear that shares of Tesla Motors Inc. (NASDAQ: TSLA) are going to trade lower by around 11%. But where will those shares trade at the closing bell?

Tesla’s quarterly results were actually pretty good and beat consensus estimates on both adjusted earnings per share and revenues. The car maker increased production by 10% and shipped more than 6,000 cars. Not good enough.

The company’s CEO, Elon Musk, said on the conference call that there is too much demand for Tesla’s cars and the company does not have the capacity to build more. As we noted earlier this morning, Ford Motor Co. (NYSE: F) produces about as much revenue in one day as Tesla does in a full quarter. Analysts have expected Tesla magically to increase production by orders of magnitude and have priced the stock with that magic in mind. Musk’s plans to expand sales internationally and to build less expensive models will take years to realize.

It is very likely that the options market will drive the stock price for the next little while. More than 26% of the company’s shares were held short at the end of October. According to our own review, the nearest speculative contracts were $180 weekly calls and $170 weekly puts. That implies a $14 per share move in one direction or the other. So far Wednesday morning, shares are down about $20, so a lot of shorts are likely to take their profits and move along.

Even Musk has said that Tesla’s shares are overvalued. When we look at the competitive landscape, with luxury carmakers like BMW, Porsche and Mercedes on one the one hand and mass-market makers like Ford, General Motors Co. (NYSE: GM) and Toyota Motor Corp. (NYSE: TM) on the other, Tesla is not in an enviable position. Adding a crossover model to the company’s lineup and trying to compete at both ends of the market could spell disaster in the medium-term.

There might be some buyers out there who think that buying the dip in Tesla stock is a smart move today. Maybe, but not a good bet. The run-up in the share price may have hit its euphoric peak and start retreating to its more rational level. Where that might be is probably considerably below where the stock closed Tuesday.

So far, Tesla’s shares are down nearly 12% at $155.80, after closing at $176.81 Tuesday night. The 52-week range is $29.85 to $194.50, and the consensus price target was around $170 before the company reported results. That target is almost certain to go lower.

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