shares have continued to decline in 2024, causing the electric-vehicle manufacturer's market valuation to plummet below $500 billion. The company's struggles were further highlighted this week as a round of job cuts took place, emphasizing the significant slowdown in Tesla's growth.

The stock experienced a sharp decline on Tuesday, falling as much as 4.8% to below $154 in New York. With a dip of around 37% this year, Tesla shares now rank as the second-biggest decliner on the S&P 500 Index in 2024, wiping out approximately $290 billion in shareholder wealth. This drop marks the first time since late April of the previous year that Tesla's market value has fallen below $500 billion.

Ryan Brinkman, an analyst at JPMorgan Chase & Co., has expressed concerns about Tesla's hypergrowth narrative, asserting that the recent reduction in employment and capacity has broader implications for the company's share price. This development suggests a significant downside risk for Tesla's stock and indicates that the decline in deliveries is primarily driven by lower demand, rather than supply constraints.

The company's troubles initially emerged last October when it cautioned about a slowdown in electric vehicle (EV) demand. However, the extent of this weakness only recently became evident when Tesla's first-quarter sales fell significantly below analysts' expectations. This revelation reignited investor worries regarding the company's growth trajectory, which were further intensified by news of Tesla's decision to shift focus from manufacturing a cheaper EV to developing a "robotaxi."

Tesla's CEO Elon Musk announced plans to unveil the robotaxi in August, but this pivot comes at a time when the company's profit outlook is rapidly deteriorating. To attract buyers, Tesla has repeatedly lowered the prices of its vehicles, which has further contributed to concerns about demand. These challenges were compounded by the recent announcement of large-scale job cuts and the departure of two key executives, leading to a further decline in sentiment.

Unlike other car manufacturers, Tesla's diminishing interest from consumers presents a more severe scenario due to its premium valuation, largely based on its potential to dominate the future EV industry. Nevertheless, Musk himself has acknowledged that unless the company can address the self-driving car problem, Tesla's value could essentially be reduced to zero.

Analysts and investors argue that while developing a fully self-driving vehicle is crucial for the company's prospects, creating an affordable EV is vital for sustaining growth in the interim. This is particularly pertinent since experts believe that mass adoption of self-driving cars may take several decades. David Wagner, a portfolio manager at Aptus Capital Advisors, suggests that investors are eagerly awaiting the launch of a lower-cost platform that could significantly revive Tesla's growth. However, doubts are emerging about the viability of this scenario since China's BYD already manufactures a $25,000 car.

BYD Co., a Chinese EV-maker, surpassed Tesla as the world's largest seller of electric cars during the final quarter of 2023. Although not available in the United States, the company offers a range of affordably priced EVs within its lineup.

Tesla is set to report its first-quarter results on April 23, and the stakes are rising rapidly for the company. Investors will be seeking an explanation as to why Tesla is making a strategic shift at a time when its growth is uncertain.