Tesla stock is dropping on a report that its low-cost vehicle will be delayed to 2026

The move: Tesla stock dropped 6% on Monday to $227.24, extending its year-to-date decline to 44%.

Why: Monday’s sell-off came after Reuters reported on Friday that Tesla is delaying its long-anticipated low-cost vehicle until 2026.

Previous guidance from Tesla suggested they would begin producing a low-cost vehicle in the first half of this year. The vehicle is expected to cost around $30,000.

According to the report, Tesla is aiming to produce 250,000 lower-cost vehicles in 2026.

Also weighing on Tesla shares was Barclays’s price target cut ahead of its Tuesday earnings report. The bank cut its target to $275 from $325, citing lower vehicle deliveries and falling profit margins.

What it means: The potential delay is likely dismaying for investors as they prepare to digest the carmaker’s first-quarter earnings report this week. Shareholders will be keenly attuned to any mention of the timeline for the lower-cost model and updates on initiatives like the robotaxi and full self-driving.

This wouldn’t be the first time Tesla has failed to meet its production timelines. In 2017, Tesla introduced an electric semi-truck vehicle, with a target of production beginning in 2019. Production didn’t occur until October 2022 and has since been paused.

Tesla’s second-generation Roadster was revealed in 2017 but has yet to go into production.

However, investors and Wall Street analysts eagerly await the lower-cost vehicle because it could significantly boost their sales volume, which has been dropping in recent years.

President Donald Trump’s tariffs also aren’t helping Tesla.

“25% auto tariffs have been enacted delaying future lower cost models for Tesla even though Musk is vocally against the tariffs for obvious reasons,” Wedbush analyst Dan Ives said in a note on Sunday.