Tesla The company’s shares fell for a seventh straight day, hitting their lowest level since January 2023, with further losses over the weekend ahead of the company’s first-quarter earnings report on Tuesday.
The stock was down 3.5% at $141.94 as of Monday afternoon, bringing its annual decline to 43%, the second lowest among S&P 500 stocks.
Tesla price cuts The company is offering discounts of up to $2,000 on its most popular electric vehicles, the Model Y SUV and the entry-level Model 3 sedan, across the US, China and Europe. Tesla has also cut the price of its advanced driver assistance system by a third. The system is marketed as a fully self-driving (FSD) option, although it requires a human driver behind the wheel, ready to steer or brake at a moment’s notice.
The FSD option, which previously cost $12,000 upfront and $199 per month in subscriptions, is now listed on Tesla’s website for most US customers. The website costs $8,000 upfront and a $99 monthly subscription The price cut comes after Tesla launched a one-month free trial for customers across North America in late March.
The latest cuts add to investors’ worries about weak first-quarter deliveries, layoffs and a cybertruck to remember.
Last week, Tesla announced a voluntary recall of 3,878 Cybertruck vehicles repaired to fix a serious “stuck pedal” defect seen in a viral video of a Cybertruck owner on TikTok.
According to a document from the National Highway Traffic Safety Administration, the pad on top of the Cybertruck’s accelerator pedal can come loose and stick on the inside, causing “unintended acceleration.”
The recall notices and price cuts come after Tesla launched a steep and chaotic restructuring, telling workers earlier last week that it would lay off more than 10% of its workforce worldwide. The layoffs are ongoing, with some employees receiving layoff notices in the past few days, two current employees said on condition of anonymity.
First-quarter earnings were discussed in a conference call Tuesday afternoon after Tesla released plan results. The London Stock Exchange Group (LSEG) said analysts had expected revenue to fall 5.1%, the first year-on-year decline since the second quarter of 2020, when the coronavirus pandemic disrupted operations.
“Tesla ( TSLA ) confidence has deteriorated since late 2023,” Bank of America analyst John Murphy wrote in a note Monday that he expects investors to focus on comments related to “growth initiatives, particularly the Model 2.” Generation Platform” and Robotaxis.
According to a Reuters report, at Musk’s direction, Tesla is “abandoning” its recent plans to launch a very affordable Model 2 electric car and is instead focusing on developing robot taxis.
UBS analyst Joseph Spack wrote in a note on Monday that investors should “expect some fireworks” on the call, adding that Tesla’s vehicle gross margin (excluding environmental credits) and free cash flow will be key metrics.
“It will likely become quarterly free cash flow negative,” Sparks wrote, adding that cash has become more important to Tesla’s story because “the current environment does not allow for the deployment” of robotaxi and more affordable car financing.
Traders shorting Tesla are reaping the rewards of falling stock prices.
As of Monday’s first half, short interest in the electric car maker was about 111 million shares, or 4% of outstanding shares, with a nominal value of $16.3 billion, according to S3 Partners. Tesla short sellers have made an estimated $9.4 billion this year, making them the most in the U.S. by a wide margin. Turned into a profitable short seller apple 3 billion US dollars.
—CNBC’s Michael Bloom contributed to this report.
Watch: Tesla shares hit a 52-week low ahead of the earnings report
Tags: Tesla shares hit #15month ahead earnings report Wall Street worries price cuts layoffs
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