(Reuters) – Tesla fell 4% on Monday. The latest global price cuts have heightened Wall Street's concerns about electric car makers' falling profits ahead of their earnings reports later this week.
Over the weekend, the company slashed the prices of its Model 3, Model Y and other cars by up to $2,000 in several markets, including the U.S., China and Germany, in its latest effort to stimulate demand slowed by high interest rates.
The cuts come ahead of Tuesday's quarterly results, in which the world's most valuable automaker is expected to record its lowest revenue and lowest gross profit in nearly four years, according to LSEG data.
Investors came after CEO Elon Musk said last week that the company would cut 10% of its workforce and focus on self-driving cars, a “tangibly obvious” move. We are waiting for a clear explanation from him regarding Tesla's strategy.
Earlier this month, Musk announced that his company's “RoboTaxis” plan would be released in August after Reuters reported on April 5 that Tesla had scrapped plans to develop its long-awaited affordable electric vehicle in favor of robotaxi. It was announced that an event would be held to announce “. “Reuters is lying,” Musk said after the report, without mentioning the inaccuracies.
Wedbush Securities analyst Dan Ives said in a preview note last week that the results would be a “moment of truth” and “one of the most important moments in the company's history.” wrote.
Tesla stock fell to $141.1 on Monday. Surveys and experts say Musk's right-wing political leanings and polarizing public comments have turned away some potential buyers of the company's cars. The stock has lost about 41% of its value so far this year.
Monday's decline will erase nearly $20 billion from the company's $468 billion market capitalization based on total outstanding shares.
Tesla remains the world's most valuable automaker, but Toyota is gradually closing the gap on the back of a boom in demand for hybrid cars.
The Japanese automaker's market capitalization was $306 billion at the last close.
(Reporting by Aditya Soni in Bengaluru; Editing by Krishna Chandra Eluri)
