Tesla (TSLA) shares tumbled more than 9% Thursday afternoon after the electric carmaker's 澳洲幸运5官方开奖结果体彩网:lackluster earnings report for the third quarter the day before showed that price cuts ate into profit margins. However, CEO Elon Musk blamed high interest rates for rendering the lower prices ineffective at lifting sales volume and warned that "stormy" macroeconomic conditions could prove to be challenging for the company.

Higher Rates Prompted Tesla Price Cuts That Aren't Effective

Tesla isn't immune to broader economic challenges, including rising interest rates and persistently high inflation, which are affecting the 澳洲幸运5官方开奖结果体彩网:auto industry and consumers.

Given that many car buyers take out loans to pay💖 for their𝔍 vehicles, rising interest rates have made it more difficult for consumers to finance these purchases.

"If interest rates remain high or if they go even higher, it's that much harder for people to buy the car. They simply can't afford it," Musk said on the company's earnings call.

That's prompted Tesla to reduce the selling prices of its vehicles in an effort to drive sales growth, which hurt the company's 澳洲幸运5官方开奖结果体彩网:profit margins ܫin the latest quarter. But interest rates have gone up faster, limiting any ♒impact the lower prices may have had in helping customers purchase Tesla cars.

"When you look at the cost or the price reductions we've made in, say, the Model Y, and you compare that to how much people's monthly payment has risen due to interest rates, the price of the Model Y is almost unchanged," Musk said on the call, referring to an internal cost analysis done by the company.

In💝terest Rates, Economic Concerns Weigh On Factorღy Expansion

Higher interest rates and a challenging global economic backdrop also have prompted Tesla to delay the construction of a new gigafactory in Mexico. However, Musk reiterated that construction is a matter of when, not if, and depends on the trajectory of 澳洲幸运5官方开奖结果体彩网:interest rates.

"The question is really just one of timing, and there's going to be a broken record on the interest front. It's just that interest rates have to come down," Musk said. "I think we want to get a sense of the global economy before we go full tilt on the Mexico factory."

Cybertruck Production Challenges

Deliveries of Tesla's highly anticipated 澳洲幸运5官方开奖结果体彩网:Cybertruck are set to begin Nov. 30. On the company's earnings call, Musk said there may be "enormous challenges" in reaching volume production and positive 澳洲幸运5官方开奖结果体彩网:cash flow, but reiterated that such production challenges are "normal" when dealing with products as different and advanced as the Cybertruck.

"If you want to do something radical and innovative and something really special like the Cybertruck, it is extremely difficult because there's nothing to copy," Musk said.

Analysts' Reaction to Tesla Earnings

In a research note, analysts at Wedbush Securities characterized Tesla's third-quarter earnings call as a "mini disaster," as Musk and other executives focused on higher interest rates and production challenges related to the Cybertruck, whereas Wall Street had expected more clarity on Tesla's falling margins and price cuts.

Even so, Wedbush analysts remain bullish on Tesla, and maintained their "澳洲幸运5官方开奖结果体彩网:outperform" rating on the automaker's stock. The analysts lowered their price target on TSLA to $310 fไrom $350, reflecting increased caution from Musk and other executives.

Analysts at Bank of America were slightly more pessimistic and assigned a "neutral" rating to the stock, citing macroeconomic risks, price cuts, and increased competition in the 澳洲幸运5官方开奖结果体彩网:electric vehicle (EV) market. The analysts reduced their year-end profit estimates but said Tesla's 澳洲幸运5官方开奖结果体彩网:gross margin could🌊 recover slightly over the coming quarters.

Despite Thursday's tumble, Tesla shares have still more than doubled since the start of 2023.