Tesla has had a difficult month. The EV giant has lost more than a fifth of its entire worth in the last 26 days, with its share price plummeting in response to weak first-quarter delivery and earnings figures.

Wall Street’s top analysts have become wary of the tech titan, and the selloff has undoubtedly depleted some of CEO Elon Musk’s personal riches.

So what went wrong that Tesla lost so much of its value in less than a month?

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Tesla shares have dropped 22 per cent in less than a month, falling from more than $207 on March 31 to $160.67 when markets closed Tuesday. That means the company is behind the tech-heavy Nasdaq Composite index, which fell just 2 per cent in April, and the benchmark S&P 500, which has been relatively stable during the same period.

Also read: Tesla wreaks havoc in China’s EV market with new price war, gives 50% discount on all cars

The EV manufacturer’s stock has lost nearly $143 billion in value for investors, with the company’s entire market capitalization falling to $513 billion from $657 billion at the end of last month.

Fall of the Titan
Tesla has reduced car pricing six times in 2023, resulting in the entry-level Model 3 currently costing less than $40,000, down from $62,990 at the start of the year, while the Model S and Model X are also 20 per cent less expensive than they were on January 1.

Following the strong cost-cutting measures, the company’s first-quarter deliveries set a record but fell short of certain Wall Street expectations. Some experts interpret this as evidence that the pricing war isn’t generating enough demand to counteract the consequences of a slowing global economy.

Shares plummeted as much as 7 per cent on April 3 after Tesla announced sales figures showing that it produced almost 17,000 more vehicles than it shipped in the three months ending March 31. Data indicating a decline in China’s vehicle industry, the world’s largest, has also knocked on investor confidence in Musk’s company.

Also read: Tesla’s bad start to 2023: EV maker made more cars than it could sell from Jan to Feb this year

The stock subsequently fell another 10 per cent last Thursday as the EV maker reported poor first-quarter earnings, with profits falling 24 per cent year on year.

Tesla has also boosted its internal expenditure predictions, which some investors saw as proof that Musk’s aggressive price cuts had eaten into the company’s profitability and will continue to do so.

The impact on Wall Street and the US stock market
Falling margins are to be expected when a corporation aggressively slashes prices in order to increase market share – but experts weren’t expecting a 24 per cent drop in Tesla’s profitability.

“The magnitude of margin declines was less than what I expected and what the market expected,” Morningstar stock analyst Seth Goldstein told Insider last week. “That’s why the stock market dropped. It was in response to that.”

Following Tesla’s poor earnings, some strategists lowered their price predictions, including New Constructs CEO David Trainer, who predicted that shares would fall another 83 per cent from current levels to only $28.

Others, though, say it is too early to tell how Musk’s pricing battle will play out, with cheaper Teslas potentially drawing buyers away from both traditional automakers and new EV rivals.

“Right now, it appears that the company’s competitive position is being prioritised over protecting profitability,” said Russ Mould, investment director at AJ Bell. “Only time will tell if that is the right move.”

Also read: Tesla Investor Day: Elon Musk’s ‘Master Plan’ for Tesla is ambitious, no sign of a budget car

What does all of this mean for Musk?
The world’s second-richest man gets much of his income from holdings in Tesla and SpaceX, so the EV maker’s share drop has dealt him a significant hit.

According to Bloomberg’s Billionaires Index, Musk’s net worth has dropped to $164 billion from $187 billion at the end of March, a loss of $23 billion in less than a month.

But Musk signalled on Tesla’s earnings call last week that he’d press ahead with price cuts in a bid to sell more cars, even if the strategy has already cost the company on Wall Street and hit his own net worth. “We believe that pushing for higher volumes and a larger fleet is the better option here than pushing for lower volumes and a higher margin,” he added.

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