As global economic uncertainty deepens and consumers have an increasing number of other electric vehicles to choose from, Wall Street is concerned that Tesla may have to sacrifice its level of profitability to maintain its growth rate.

Since November 2021, when the stock reached its all-time high, the company has lost about 70% of its market capitalization. Last December, it suspended car production at its Shanghai factory (which accounts for more than half of Tesla's global car shipments) due to a wave of Covid-19 infections among its employees and suppliers. Over the summer, Tesla increased the capacity of its Shanghai plant to more than 750,000 cars a year, but demand for its cars was weaker than expected in the final months of the year as the Chinese auto market slowed.

At the same time, Tesla has been offering increasingly favorable pricing: in early December, the company added a note to its U.S. website offering a $3,750 discount and 10,000 free miles on Supercharger stations. The condition was to take delivery of a new Model 3 sedan or Model Y crossover by the end of 2022. Moreover, in the third quarter of last year, Tesla said it produced 22,000 more cars than it delivered globally, raising concerns about a drop in demand.

Several Wall Street analysts said they expect more pressure on Tesla's stock in the coming months as it faces stiffer competition from other electric carmakers, as well as weaker global demand.