Tesla (NASDAQ: TSLA) is one of the world's largest manufacturers of electric vehicles (EVs), but it faces growing competition and softening demand, which are heavily impacting sales. As a result, Tesla stock is trading 43% below its all-time high from 2021.

Last year, the company slashed its EV prices by an average of 25.1% to counteract those headwinds, and the industry as a whole continued to trim prices in the first quarter of 2024 (according to Cox Automotive). As a result, Tesla's profitability is plummeting. Its earnings per share shrank 46% year over year during the second quarter of 2024 alone.

Unfortunately, the price cuts haven't meaningfully boosted sales. Tesla delivered a record 1.8 million EVs during 2023, but its 38% growth rate marked the second consecutive year of deceleration. In the first two quarters of 2024, deliveries actually shrank on a year-over-year basis:

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Source Fool.com