Tesla’s rocky year — plagued by price cuts, recalls and layoffs — continued Monday as shares of Elon Musk’s electric vehicle company dropped more than 3% ahead of Tuesday’s much-anticipated quarterly earnings.
Tesla stock fell for the seventh straight day, closing at $142.05, its lowest price since closing at $133.42 on Jan. 20, 2023.
Since the start of the year, Tesla has fallen nearly 43% — wiping out more than $60 billion from Musk’s net worth and knocking him from his perch atop the world’s richest people.
Musk’s fortune likely won’t improve Tuesday. Tesla is expected to report a 40% plunge in operating profit and its first revenue decline in four years, according to Bloomberg.
“The stock will need to undergo a potentially painful transition in ownership base, with investors previously focused on Tesla’s EV volume and cost advantage potentially throwing in the towel,” Deutsche Bank analyst Emmanuel Rosner told the outlet.
Monday’s stock drop followed an announcement over the weekend that the EV maker slashed prices in a number of its major markets, including China and Germany, following price cuts in the US, as it grapples with falling sales and an intensifying price war, especially against Chinese electric vehicles.
Tesla also chopped the price of its Full Self-Driving (FSD) driver assistant software to $8,000 from $12,000 in the US on Saturday.
The price cuts followed last week’s 10% culling of its global work force. Separately, Tesla also issued a recall on nearly 4,000 Cybertrucks because of a potential fatal flaw involving the gas pedal.
The combination of bad news has left investors feeling less than optimistic about Tesla’s upcoming earnings report.
Earlier this month, Tesla reported that it delivered 386,810 vehicles in the first three months of the year – missing analyst estimates by a wide margin.
The company also told investors that its rate of growth will be “notably lower” this year thanks to interest rate hikes that have made it more difficult for consumers to borrow money to buy a car.
Last month, Tesla had to temporarily pause production at its Berlin factory after a suspected arson attack caused significant damage at the facility.
Musk canceled this week’s visit to India, where he was due to meet with Prime Minister Narendra Modi.
The mogul, who has seen his fortune shrink by some 35% since it hit a record high of $256 billion last year, cited “very heavy Tesla obligations” as the reason that his visit to India was pushed back.
According to Bloomberg Billionaires Index, Musk’s fortune was valued on Monday at $168 billion – making him the fourth richest person in the world.
The South African-born Musk had long occupied the world’s richest person title, which is now held by French luxury magnate Bernard Arnault and his family thanks to their $218 billion fortune.
Amazon founder Jeff Bezos ($197 billion) and Meta CEO Mark Zuckerberg ($171 billion) are the second and third richest people in the world, respectively.
Musk’s company is feeling the pinch of intense competition in the EV market – particularly from upstart Chinese firms such as Warren Buffett-backed BYD.
In hopes of competing, Tesla slashed prices of its EVs in China and Germany – matching similar price cuts in the US.
“Tesla prices must change frequently in order to match production with demand,” Musk wrote on his social media platform X over the weekend.
Earlier this year, Reuters reported that Tesla had canceled its plan to develop an affordable EV and would instead focus its efforts on building a robotaxi.
Musk denied the claim, writing on X: “Reuters is lying.” The news agency said it stood by its reporting.
Last week, Tesla asked its investors to vote again on Musk’s $56 billion pay package — a deal approved by shareholders in 2018, but which was voided by a Delaware court earlier this year.
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