Tesla's Share Price Drops as Investors React to Repeated Price Cuts on Electric Vehicles"

Tesla's share price dropped nearly 10% following its disappointing earnings report on Wednesday evening, in which its profit margins fell below the 20% mark that analysts had forecasted. The company had announced its sixth price cut of the year earlier in the week in an effort to boost sales volume, but revenue was down from fourth-quarter levels, resulting in a squeeze on profits. CEO Elon Musk explained that the company was prioritizing sales volume over profit margins, and lower prices were necessary to combat economic uncertainty and rising interest rates. 

Tesla's profit margins are still well ahead of those of traditional automakers, but the company's refusal to give any guidance on where its profit margins might go from here has fed investor concerns. Tesla shares had their worst year on record in 2022, losing 65% of their value, and have been struggling since climbing 74% through February 15 this year. Shares have lost 24% since that February peak, with most of the loss occurring in the last three weeks. Some analysts remain optimistic for Tesla's financial future, with a median 12-month price target of $200, up 23% from the current price. However, 10 analysts cut their price targets for Tesla on Thursday, with some suggesting that Tesla is being forced to cut prices due to weaker demand than it is admitting to.