Just what IS happening at Tesla? Ahead of what is feared will be its worst earnings results in 7 years, here's what's going wrong for the once-thriving EV maker

Tesla investors are gearing up for what is expected to be its worst quarterly earnings results since early 2017, as sales dwindle and it scraps major new projects.

CEO Elon Musk will host the ailing automaker's earnings call on Tuesday and attempt to assuage investors' concerns that the company is heading for a catastrophe.

As of Monday, it was the second-worst performer in the S&P 500 this year. Its share price was down 43 percent to $141 - well below its all-time high of $410 in 2021.

'The Street wants and NEEDS answers next week on Tesla's 1Q conference call next Tuesday,' said Wedbush analyst Dan Ives in a research note last week.

Ives described how the 'string of bad news over the last few months has been a horror show for investors' and suggested many could soon 'head for the elevators during this Category 5 perfect storm.'

Tesla investors on Tuesday will expect CEO Elon Musk to address a series of crises that have seen its share price fall more than 40 percent so far this year

Tesla's Cybertruck was released earlier this year but was plagued with issues. Last week all models were recalled over a defect that caused their accelerator pedals to jam

The analyst noted that Musk has behaved erratically during recent quarterly earnings calls, failing to inspire confidence in investors.

'If Musk is flippant again and there is no adult in the room on this conference call with no answers then darker days are ahead,' he said.

Fueling the crisis at Tesla is reduced demand for EVs in the US, a price war with increasingly capable Chinese electric car makers, and a wave of issues surrounding its newly released Cybertruck.

Last week the automaker recalled nearly 4,000 Cybertrucks in order to fix an accelerator pedal fault that could cause the EV to accelerate at top speed.

This month alone Tesla also announced it was laying off 10 percent of its staff and reported its global vehicle deliveries in the first quarter fell for the first time in nearly four years.

It was also reported the company had abandoned plans to make the so-called 'Model 2' - a budget $27,000 car that it was hoping could capture the mass market. 

Musk said instead the company would focus on developing self-driving robo-taxis.

But Ives has also warned that this strategy is riddled with issues too, as he said a fully-autonomous robo-taxi may not be ready for another five to six years.

Tesla deliveries were significantly lower than projected by Wall Street as the company faced increased competition in China and waning EV demand in the US

Meanwhile companies like BYD, Li Auto and Nio are some of the largest EV manufacturers in China and producing cars for as little as $10,000 - around a third of the price of the cheapest electric car available in the US.

Though Chinese cars are not directly impinging on Tesla sales in the US, they are elsewhere in the world. Chinese EVs had just 0.5 percent of the European market in 2019 but some 9.3 percent in the fourth quarter of 2023.

In a bid to boost sales in the face of dwindling demand, Tesla this weekend started slashing the price of its cars around the world.

Tesla cut the starting price of the Model 3 in China by 14,000 yuan, or $1,900, to 231,900 yuan, or $32,000, its official website showed on Sunday.

Chinese EV maker BYD recently released the Seagull, which costs $9,700 in China. Tesla recently scrapped its plans to make a cheap 'Model 2' car for the mass market

Tesla recorded its first year-on-year sales drop since 2020 earlier this month. It delivered 386,810 vehicles in the first three months of the year, down 20 percent from the previous quarter and 9 percent from the same period in 2023

In Germany, the price of the Model 3 rear-wheel-drive was slashed by 2,000 euros to 40,990 euros, or around $43,600. There were also price cuts in many other countries in Europe, the Middle East and Africa, a Tesla spokesperson told Reuters.

Musk took to X, formerly Twitter, to defend criticism of the price changes.

'Tesla prices must change frequently in order to match production with demand,' he wrote. '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,' he added.

Another blow for Tesla came earlier this year when rental companies Hertz and Sixt both announced they were taking steps to remove EVs from their fleets due to a lack of demand and their tanking value.

At the heart of many of Tesla's recent issues is the Cybertruck, which Musk's critics have branded a vanity project that generated little value for shareholders.

While in recent years most EV manufacturers were working hard to build affordable EVs that could bring electrification to the masses, Tesla was busy developing the Cybertruck.

The unconventional vehicle bears little in common with typical cars and features many costly gimmicks, according to its critics. 

Choosing to make the vehicle's body out of stainless steel has been a source of countless issues for Tesla.

This month Elon Musk sent an internal memo indicating the company would lay off around 10 percent of its total workforce

The truck's doors are bulletproof, but using the material resulted in the production of vehicles with huge and inconsistent panel gaps.

The fiasco even prompted Musk in the months before the truck's release to send an internal memo to employees urging them to prioritize quality.

Then, after the truck shipped, owners started to complain about cosmetic issues with the stainless steel body panels, on which small spots of rust-like corrosion appeared.

Another controversy broke out around the truck's 'frunk.' Some owners noticed that when it closes its sharp edges would act almost like a guillotine, slicing anything that gets in the way.

But perhaps the most sizable blow came last week when it was revealed the company would recall almost 4,000 of the Cybertrucks that had shipped with accelerator pedals that could get jammed down.

Unlike most recalls with 'over-the-air updates,' owners were instructed to bring in their vehicles. Tesla's fix involved drilling a hole in the bottom of the pedal and installing a rivet to hold its cover down.

Musk will be expected to answer investors' questions during the company's earnings call, which will be live-streamed at 4.30pm CT on X.