Tesla's stock dropped for a seventh consecutive day on Monday, sinking to its lowest price since January 2023. The decline in share prices came as the electric vehicle manufacturer implemented price cuts for its vehicles in the U.S., China, and Europe. Additionally, Tesla reduced the price of its premium driver assistance option.

Closing at $142.05, the stock experienced a 3.4% drop, bringing its year-to-date decline to 43%, making it the second-worst performer among S&P 500 members. The price cuts, ranging up to $2,000, were mostly applied to Tesla's popular models, including the Model Y SUV and the entry-level Model 3 sedan. Moreover, the cost of the Full Self-Driving (FSD) option, which requires a human driver at the wheel, was lowered by one-third. The FSD option, previously priced at $12,000 upfront or $199 per month on a subscription basis, now stands at $8,000 upfront and $99 monthly.

The decision to reduce prices follows a month-long free trial of the FSD option that Tesla offered to customers across North America starting in late March. However, these price cuts add to mounting concerns among investors, who have been worried about weak first-quarter deliveries, recent layoffs, and a recall involving the Cybertruck.

Tesla had initiated a restructuring process involving layoffs, with more than 10% of its global workforce expected to be affected. The layoffs are ongoing, with some employees receiving notifications of job eliminations in the past couple of days.

On Tuesday, Tesla is set to announce its first-quarter earnings, with analysts anticipating a predicted 5.1% drop in revenue compared to the same period last year. Bank of America analyst John Murphy noted that sentiment on Tesla has deteriorated since late 2023. He believes that investors will focus on the company's growth initiatives, particularly the Model 2 "next-gen platform" and the robotaxi concept.

Despite the downturn in stock prices, short sellers of Tesla's stock are expected to reap significant profits. Short interest in the company stands at around 111 million shares, representing $16.3 billion in notional value. Traders betting against Tesla have reportedly earned an estimated $9.4 billion in profits this year, making it the most profitable short in the U.S. market.

Investors and analysts will be closely watching Tesla's earnings call for insights on the company's automotive gross margins and free cash flow. Speculation suggests that a negative free cash flow quarter may be possible, considering the financial demands of both the robotaxi project and the development of a more affordable electric vehicle.

The stock slide and upcoming earnings call will undoubtedly make for an eventful day for Tesla and its investors.