Shares of Tesla gained today ahead of the electric car maker's first-quarter results, with analysts expecting its lowest gross profit margin in more than six years due to price cuts and slowing demand.
The stock rose 2.9% to $146.19 ahead of the report, due after the closing bell.
A weak first quarter would represent the latest hit to the electric car-maker, which has seen its share price fall by nearly 43% so far this year.
Earlier this month Tesla announced that its delivery of new cars fell for the first time in four years, with its shipment of 386,810 cars coming well short of Wall Street expectations of 454,200 deliveries.
Last week it was revealed the company would lay off 14,000 workers worldwide - representing 10% of its global workforce.
Yesterday it announced price cuts in multiple markets - including Germany and China - as it tried to drum up demand and compete against an ever-growing list of rivals.
"It really does show that the price war is intensifying - particularly in China," said Susannah Streeter, head of money and markets at Hargreves Landsowne. "What Tesla is facing is falling sales, competition has ramped up - particularly from Chinese arrivals like BYD, Li Auto and AITO.
"These companies are flooding the market. In China, for example, they're expecting to deliver 2.3m units this year - but state planners only estimate that 2.1m vehicles will be needed to meet demand."
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European and American car-makers have also ramped up their efforts in electric vehicles.
That includes a push towards more affordable models, with the Dacia Spring selling in mainland Europe for €20,000, and companies like Ford and Volkswagen planning to launch compact models of their own in a similar price range.
Telsa had plans of its own for a sub-€25,000 car, but Reuters recently reported that that was being abanoned.
Elon Musk denied the claim but did not give any concrete details of its plans - suggesting such a model is, at the very least, a long way away from becoming a reality.
That leaves Tesla with few clear growth opportunities.
It has been slow to refresh its existing models, meaning they are at risk of losing ground to faster-moving rivals in China and Europe.
Meanwhile its latest launch - the Cybertruck - has been beset with problems including a recall to fix an issue with its accelerator.
The recent Reuters report did, however, suggested the company would move towards the development of a 'robotaxi', as it seeks to take better advantage of its attempts to build a fully self-driving car.
"One potential bright spark is that it recently cut the price of its self-driving software," said Ms Streeter. "On its own that looks like part of the issue, it's trying to cut prices to compete, but here we're expecting the unveiling of its robotaxi.
"If anything about that is mentioned I think there will be a lot of interest - because there's an expectation this robotaxi would be released later in the summer and any more details about this, which could be a game-changer for Tesla... that does offer potential revenue streams to increase quite markedly in the future."
Despite all of the challenges facing Tesla, the company has asked shareholders to once again approve a $56 billion pay packet for Mr Musk.
This deal, originally backed by shareholders in 2018, was based on Tesla's market value rising to as much as $650 billion.
It passed that treshold in late 2020 - rising beyond a $1 trillion valuation in the following year - however the pay deal was nullified by a Delaware court earlier this year after a shareholder took a case against it.
Today Tesla's market capitalisation is less than $450 billion - well below the treshold set out in the original pay deal.
That may make it a challenge for shareholders to ratify a second time around.
"I think there is going to be quite a lot of resistance," said Ms Streeter. "That pay packet was put forward on the basis of a much, much higher share price and Tesla's shares have really not been doing well this year.
"Tesla is now really the lagard in the so-called Magnificent Seven pack, because of the performance of the shares, because of the performance of the company, and the fact that deliveries in the first quarter did not meet expectations."
