Tesla, the electric vehicle (EV) giant, is experiencing a tumultuous year as its fortunes take a sharp turn in 2024. The company's stock, which soared in 2023, has become the worst-performing stock on the S&P 500 in the first quarter of this year, facing a range of difficulties including disappointing earnings reports, price cuts in the EV industry, and concerns about high interest rates impacting demand.

In April, Tesla continued to face setbacks as it reported a 9% decline in first-quarter deliveries compared to the previous year. To further compound the challenges, the company made the surprising decision to lay off over 10% of its workforce. As a result, Tesla's stock has plummeted by 11% in the past week, reaching near its 52-week low while the broader market is reaching all-time highs.

Despite the recent decline in stock value, Tesla remains highly valued at $500 billion, making it one of the most valuable stocks in the country and significantly more valuable than competitors like General Motors and Ford. However, the company now confronts obstacles on multiple fronts.

A notable concern is the weakening demand indicated by decreasing vehicle deliveries, which not only fell in the first quarter but also significantly missed production targets. Increased competition in the EV industry has led to falling prices, potentially impacting profitability. Media reports have also suggested that Tesla is pausing the development of its more affordable Model 2 to focus on its robotaxi and full self-driving technology.

Furthermore, the company's decision to cut its workforce and the departure of two key executives involved in battery and vehicle manufacturing serve as further indicators of underwhelming demand and potential internal challenges.

With Tesla's stock down 37% this year, the future outlook raises questions about whether it could be considered a buying opportunity. Amidst a struggling EV market facing increased competition, weakening demand, and high-interest rates, Tesla is placing its hopes on the development of its robotaxi and full self-driving technology. CEO Elon Musk announced that the company would unveil the robotaxi on August 8. However, Tesla has a history of delaying promises and product releases, and the regulatory landscape presents potential challenges for a full rollout of autonomous vehicles.

While Tesla's robotaxi could be a game-changer for the company, other players in the market, such as Alphabet's Waymo and General Motors' Cruise, have also made significant progress in autonomous driving technology. Tesla's stock continues to carry a premium despite the slowdown in EV sales, leaving investors awaiting a return to solid growth in EV sales and profits or a groundbreaking presentation of the robotaxi to see potential stock recovery.

In light of the current economic environment and the headwinds facing the electric vehicle sector as a whole, experts suggest exercising caution when considering Tesla stock. The company's core growth story, centered around selling EVs, appears to be on hold for now, pending improvements in deliveries and prices. Until then, Tesla stock is seen as a risky bet.

Suzanne Frey, an executive at Alphabet, serves as a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any mentioned stocks. The Motley Fool has positions in and recommends Alphabet and Tesla, and it recommends General Motors.