Tesla Inc. faced a significant stock drop, plunging up to 10%, following Elon Musk's efforts to redirect investor focus from slower sales growth, a move that failed to resonate. The company, which spent 2023 cutting prices to spur sales, encountered challenges as the effectiveness of this strategy diminished, impacting profits. Executives acknowledged reaching the limits of cost-cutting measures on the existing vehicle lineup, signaling a departure from the past's robust growth targets. Despite Tesla's deviation from offering specific targets for the upcoming year, it fell short of the previously guided 50% annual growth, reporting a 38% increase in vehicle deliveries for 2023. Analysts foresee a 20% increase this year.

The absence of a positive outlook for 2025, coupled with concerns about growth and margins, contributed to the steepest intraday drop in three months. Musk suggested a temporary setback, emphasizing plans for a new, more affordable vehicle in late 2024, aiming to attract a broader market. In the interim, Tesla faces challenges with its existing lineup and the gradual rollout of the Cybertruck. The company's automotive gross margin slightly improved at 17.2% for the quarter but remains impacted by price cuts, increased R&D spending, and expenses related to new product launches.