(NASDAQ: TSLA) reported earnings after the market closed on July 23, and the results were illuminating. The company's automotive business appears to be stagnating while margins continue to contract. Let's dig deeper into Tesla's challenges and discuss whether or not its CEO, Elon Musk, can pull off another incredible turnaround.

Electric vehicles (EVs) are no longer the hot and exciting opportunity they once were. U.S. sales growth has slowed to 2.6% year over year in the first quarter of 2024 (268,909 vehicles) down from a 46.4% growth rate in the prior year period. And competition is increasing as more automakers invest in the technology.

On a global scale, the biggest challenge might come from low-cost Chinese rivals like BYD, which overtook Tesla as the world's largest EV maker in January. The Shenzhen-based company boasts in-house battery production, which allows it to offer rock-bottom prices. BYD's cheapest car, the Seagull, starts at around $12,000, compared to Tesla's Model 3, which retails at a relatively pricy $32,000 in China.

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Source Fool.com