Tesla shares continued their decline, reaching their lowest point since January 2023, as further price cuts and mounting concerns weighed on investors. The stock fell 3.5% on Monday afternoon, bringing its year-to-date decline to 43%, ranking it as the second-worst performer among S&P 500 members.
Tesla recently implemented significant price cuts across the U.S., China, and Europe, with reductions of up to $2,000 on popular models such as the Model Y SUV and Model 3 sedan. Additionally, the company lowered the cost of its premium driver assistance system, Full Self-Driving (FSD), by one-third. These actions come after Tesla offered a free one-month trial of FSD to North American customers in late March.
The latest price cuts and other concerns have exacerbated investor fears, which were already elevated due to weak first-quarter deliveries, layoffs, and a Cybertruck recall due to a serious pedal defect. The voluntary recall affected 3,878 Cybertruck vehicles and aimed to address a potential accelerator pedal issue that could cause unintended acceleration.
Prior to the recall and price cuts, Tesla announced a substantial and complex restructuring, informing employees of plans to reduce its global workforce by over 10%. The layoffs are ongoing, and current employees have reported receiving layoff notifications in recent days.
Analysts expect Tesla to report a 5.1% revenue decline in its first-quarter earnings announcement scheduled for Tuesday afternoon. This would mark the company’s first year-over-year revenue decrease since the second quarter of 2020, when the COVID-19 pandemic disrupted operations.
Traders betting against Tesla have profited from the stock’s slide, with short interest representing $16.3 billion in notional value as of Monday. Tesla short sellers have gained an estimated $9.4 billion this year, making it the most profitable short in the U.S. market.
