Tesla shares slide to 15-month low ahead of earnings, as Wall Street frets over price cuts, layoffs

Tesla shares fell for a seventh straight day, reaching their lowest since January 2023, as further price cuts over the weekend added to mounting concerns heading into the company’s first-quarter earnings report Tuesday.

The Stock

The stock dropped 3.4% on Monday to close at $142.05, bringing its decline for the year to 43%, second worst among members of the S&P 500.

Tesla cut prices in the U.S., China and throughout Europe, with reductions of as much as $2,000 on the company’s most popular electric vehicles, the Model Y SUV and entry-level Model 3 sedan. Tesla also lowered the price of its premium driver assistance system by one-third. The system is marketed as the Full Self-Driving, or FSD, option, though it requires a human driver at the wheel, ready to steer or brake at any time.

FSD

The FSD option, which previously cost $12,000 up front or $199 per month on a subscription basis for most customers in the U.S., is now listed on Tesla’s website at $8,000 upfront and $99 for a monthly subscription. The price cut follows a monthlong free trial that Tesla pushed out to customers throughout North America starting in late March.

Fears

The latest reductions add to investors’ growing fears following weak first-quarter deliveries, layoffs and a Cybertruck recall.

Last week, Tesla issued a voluntary recall on 3,878 Cybertruck vehicles to repair a serious “trapped pedal” defect seen in a viral TikTok video from a Cybertruck owner.

About E. J. McKay

E.J.McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.