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
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.
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.
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.
According
to
a
filing
with
the
National
Highway
Traffic
Safety
Administration,
a
pad
on
top
of
the
Cybertruck’s
accelerator
pedal
could
come
loose
and
get
trapped
in
the
interior
trim
causing “unintended
acceleration.”
Prior
to
the
recall
notice
and
price
cuts,
Tesla
had
initiated
a
steep
and
messy
restructuring,
informing
employees
early
last
week
that
it
would
be
cutting
more
than
10%
of
its
global
workforce.
The
layoffs
are
ongoing,
with
some
employees
receiving
notifications
their
jobs
were
eliminated
in
the
last
couple
days,
according
to
two
current
employees,
who
spoke
with
CNBC
on
condition
that
their
names
be
withheld
from
publication.
Tesla
plans
to
discuss
first-quarter
earnings
on
a
call
Tuesday
afternoon
after
releasing
results.
Analysts
are
expecting
a
5.1%
drop
in
revenue,
according
to
LSEG,
which
would
be
the
first
year-over-year
decline
since
the
second
quarter
of
2020,
when
the
Covid
pandemic
disrupted
operations.
“Since
late
2023,
sentiment
on
Tesla
(TSLA)
has
deteriorated,”
John
Murphy,
an
analyst
at
Bank
of
America,
wrote
in
a
note
on
Monday.
Murphy
said
he
expects
investors
will “focus
heavily
on
commentary
related
to
growth
initiatives,”
specifically
the
Model
2 “next-gen
platform,”
and
the
robotaxi.
Reuters
reported
that,
at
Musk’s
direction,
Tesla
is “scrapping”
plans
to
launch
a
very
affordable
Model
2
electric
car
in
the
near
term
and
will
instead
focus
on
development
of
a
robotaxi.
Joseph
Spak,
an
analyst
at
UBS,
wrote
in
a
Monday
report
that
investors
should “expect
some
fireworks”
on
the
call,
adding
that
automotive
gross
margins
for
Tesla,
not
including
environmental
credits,
and
free
cash
flow
will
be
key
metrics.
“A
negative
free
cashflow
quarter
appears
possible,”
Spak
wrote.
That
cash
becomes
more
important
to
the
Tesla
story
because “the
current
environment
doesn’t
allow
funding
of
both”
the
robotaxi
and
a
more
affordable
new
EV.
Traders
betting
against
Tesla
are
reaping
rewards
from
the
stock
slide.
Short
interest
in
the
EV
maker
stood
at
around
111
million
shares,
or
4%
of
float,
representing
$16.3
billion
in
notional
value
as
of
the
first
half
of
the
day
on
Monday,
according
to
S3
Partners.
Tesla
short
sellers
are
up
an
estimated
$9.4
billion
this
year,
making
it
the
most
profitable
short
in
the
U.S.
market,
way
ahead
of
Apple
at
$3
billion.
—
CNBC’s
Michael
Bloom
contributed
to
this
report.
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