Tesla has cut prices three times already this year in response to flagging demand for its vehicles.
Price cuts will lead to steep margin compression, despite efforts to cut costs via online sales and employee headcount reduction.
Tesla posted profits in both Q3 and Q4 last year; CEO Musk now guides for a loss in Q1 2019, with a return to profitability expected in Q2.
Given the current price cuts, it is hard to see how Tesla can post another profit; even significant operating cost reduction would not make up the difference.
Tesla (TSLA) shocked pretty much everyone when it posted a substantial profit in Q3 2018. When the electric car company posted another, smaller, profit the next quarter, bulls were ecstatic.
Yet, things have