At the top of the list now is the Texas-based company’s widely anticipated earnings results, which fell for the first time since 2020. 

Tesla’s revenue fell 9% in the first three months of 2024 to $21.3 billion year over year—falling short of analyst forecasts. Other financial metrics like earnings per share and gross margin also slipped lower than expected.

The slump in numbers was eclipsed by another long-awaited announcement—regarding a cheaper new Tesla model. Since the company said it won’t need to set up new factories to produce the “Model 2” car, Tesla could begin production as soon as this year.

“It’s not contingent on any new factory or massive new production line. It’ll be made on our current production lines much more efficiently,” Musk said during Tesla’s earnings call. 

Not all experts are convinced. Tesla risks becoming a “show-me stock based on how many delays we’ve seen in previous rollouts,” Jay Woods, chief global strategist at Freedom Capital Markets, noted to Reuters. Then again, if Tesla delivers on its plan, it could be a game changer.

News of the Model 2 was well received by the eager EV market, as Tesla’s shares jumped following the earnings report. But it still doesn’t discount carmakers’ problems, in Europe and elsewhere. 

Hours before its earnings release on Tuesday, Tesla also noted that it was looking to slash 400 jobs at one of its German factories, following its announcement to lay off over 140,000 employees globally. 

Cheap competition from Chinese EVs has spooked Musk into cutting prices on Tesla vehicles and driver-assistance software—including in European markets like Germany. That might be turning some buyers off, according to Michael Tyndall, HSBC’s head of European automotive equity research.

“Weak sales at Tesla in Q1 are a function of slowing EV adoption (in the U.S. and Europe), but also specific issues related to Tesla—an aging lineup, some production issues, and, we would argue, constant price cuts putting off professional buyers,” he said in a note to Fortune.

In Europe, the battle might come to a head for Tesla and its rivals. Why? It’s a critical market for Tesla, as it makes the continent’s bestselling EVs, though other auto giants beat it in aggregate total sales. The so-called Tesla killer, BYD, is eyeing European markets with its upcoming production center in Hungary, intending to expand globally—and quickly. The reality of the rivalry became apparent when BYD outsold Tesla cars globally at the end of 2023. 

Other cars change prices constantly and often by wide margins via dealer markups and manufacturer/dealer incentives. Only a fool thinks the “MSRP” is the real price.

Tesla prices must change frequently in order to match production with demand.

— Elon Musk (@elonmusk) April 21, 2024

European EV winter woes

The high-stakes competition has cascaded with a slump in EV demand, adding to the American giant’s woes. Tesla’s shares are down more than 40% since the start of the year.

Some countries like Germany and Ireland have witnessed an apparent decline in EV appetite. The EV winter has hit automaking behemoths like Volkswagen and BMW as they reel from sagging sales amid low consumer spending.

While its peers shared some of the struggles of the Elon Musk–owned company in the electric-vehicle industry, others were unique to Tesla, according to Matthias Schmidt, an independent automotive analyst.

“The industry is returning to a pile ’em high, sell ’em cheap attitude in a scaling race, with Tesla not immune from that being one of the main discounting protagonists in a battle to keep to its growth narrative on script, which became ever more unlikely to meet under the current macroeconomic climate,” Schmidt told Fortune in an email.

Even if the price cuts are disputed, it might be helping Tesla out, said Rico Luman, ING’s senior economist in automotive and logistics. But there’s a catch.

“It comes at a cost, as others are forced to follow, leading to a negative price spiral eating into profitability. This year will probably be more challenging,” Luman told Fortune. He pointed to the production disruptions Tesla’s Berlin plant faced amid component shortages and an arson attack earlier this year, which have weighed on first-quarter figures. 

Tesla can’t run away from the spotlight—its infamous CEO has had his attention divided with the purchase of X, formerly Twitter, and hasn’t provided nearly enough guidance on new Tesla models that investors were waiting for. 

Musk’s company has teased a pivot to self-driving robo-taxis, over its affordable “Model 2” car. But now that both seem to be on the table, maybe it can cool Tesla investors’ nerves.

The uphill battle for Tesla isn’t ending, but will that change its position in the overall EV industry? Perhaps not, experts think.

“Tesla has been a front-runner for years in the emerging EV market, and it still is in software and productivity,” said Luman. “But the early adapter phase has passed now as the market shifts to the next phase of maturity … It’s logical that Tesla’s share of the larger market will decline as the market matures.” 

That’s not necessarily bad—it’s just part of the EV market’s progression. However, whether the world is ready for Musk’s innovations like the robo-taxi remains to be seen. As the billionaire CEO said, he only wants to keep his believers close to him. 

“If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company,” Musk told investors. “But we will. And we are.”