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Shares of Tesla edged higher on Tuesday 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 was up 2.3 per cent at $145.34 in volatile early trading ahead of the report, due after the closing bell.
CEO Elon Musk will likely face pointed questions from investors during the post-results conference call about the fate of the so-called Model 2, a low-cost vehicle he had promised in January would be available in 2025.
Reuters exclusively reported earlier this month that Tesla had scrapped plans for the model and shifted focus to building a self-driving robotaxi on the same small-car platform.
Musk initially posted on social media that "Reuters is lying", but has yet to identify any inaccuracies or clarify the fate of the model. Investors had pinned hopes for sales growth on the Model 2.
The billionaire was also scheduled to meet India's Prime Minister Narendra Modi on Monday and announce major investments in an auto factory which was expected to produce a small, affordable model. Musk postponed at the last minute, citing "very heavy Tesla obligations".
Tesla's slowing sales growth is expected to weigh heavily on Tuesday's results.
The automaker earlier this month reported an 8.5 per cent decline in deliveries and rising inventories. Over the weekend, it announced the latest in a series of price cuts globally on the Model 3, Model Y and other models, fanning concerns of more margin pressure.
Several analysts expect Tesla's annual deliveries to fall for the first time in 2024 after years of double-digit growth. The company warned in January that delivery growth would be "notably lower" this year, signaling that price cuts would be insufficient to lift demand.
Tesla shares have lost about 43 per cent so far this year, and are among the worst performers on the SP 500 index.
Wall Street expects Tesla's automotive gross margin excluding regulatory credits to be 15.2 per cent, according to 20 analysts polled by Visible Alpha, down from 19 per cent a year earlier and the lowest since the fourth quarter of 2017.
Analysts on average expect March-quarter revenue to fall 5.05 per cent
to $22.15 billion, according to LSEG data.
Musk has predicted the imminent arrival of fully autonomous cars for years, but may still be years from delivering, given the steep engineering and regulatory challenges.
He has also raised more questions with social media posts about Tesla's self-driving vehicle strategy. Musk recently teased a "Robotaxi unveil" on "8/8", presumably meaning August 2024, and later posted that going "balls to the wall" on autonomy was a "blindingly obvious" move.