Tesla is facing a challenging year as its shares have plummeted by 43% so far, causing concern among investors. The recent round of price cuts announced over the weekend further contributed to the decline, with the stock losing an additional 3% on Monday. This downward trend has raised doubts even among Tesla supporters about the future of the company, which has been one of the most profitable automakers in recent years.
Concerns about electric vehicle (EV) demand not meeting expectations have impacted all auto stocks, but Tesla has been particularly affected by a series of negative news. The company's upcoming earnings report and investor comments are eagerly awaited to gauge its future trajectory.
The announcement of price cuts on certain models, along with a decline in global sales, has added to Tesla's challenges. Plans to reduce staff by more than 10% and seeking approval to restore stock options for CEO Elon Musk have also raised eyebrows.
Tesla is now facing intense competition from both traditional western automakers and Chinese counterparts. The company recently lost its title as the world's largest EV maker to a Chinese automaker, highlighting the shifting landscape of the industry.
Despite its market cap of $469 billion, making it the most valuable automaker globally, Tesla has seen a significant drop in value from its peak. Analysts are concerned about Musk's unpredictable nature and the potential impact of his statements during the upcoming call with investors.
While Tesla remains a dominant player in the EV market, its recent challenges have led to doubts about its future growth. The company's adjusted earnings are expected to be lower than the previous year, reflecting a decline in profit margins since initiating an EV price war.
Investors are keen to hear about Tesla's future plans, including a lower-priced car model and the development of driverless 'robotaxis.' Musk's response to competition from Chinese EV manufacturers will be closely monitored, as it could significantly influence investor sentiment.
