Tesla (NASDAQ:TSLA) shares are down over 21% in April after the company delivered Q1 results last week.
The first quarter was characterized by several rounds of price cuts as Tesla struggles to attract demand in a difficult macroeconomic environment.
“Every time that the Fed raises interest rates, that’s the equivalent to an increase in the price of a car,” CEO Elon Musk said on the earnings call.
“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here, versus a lower volume and higher margin.”
In 2023, Tesla expects to produce 1.8 million vehicles, but Bernstein analysts believe the electric vehicle (EV) maker will struggle to sell these many cars.
“The company still appears to be struggling to generate sufficient demand and the impact from price cuts has been short-lived. We estimate that Tesla's run-rate demand was ~1M units exiting Q4 and ~1.2M units exiting Q1 - well below target 2023 volumes of 1.8M - despite price cuts of 10% - 20%+,” they said in a client note.
The analysts rate Tesla stock at Underperform with a $150 per share price target.
“We see risk-reward on Tesla 2023 as coming more into balance, but worry that the specter of further price cuts and downward revisions may make it difficult for the stock in the near to medium term.“
Tesla stock is down a further 1.6% in premarket Tuesday.