Tesla shares slipped 3.6% on Friday, capping a week that saw its stock lose nearly 6% with waning EV demand hitting sales and a potential future product change pressuring shares to end the week.

On Friday, Reuters reported Tesla had canceled plans to build a long-awaited, sub-$30,000 EV, sometimes dubbed the Model 2. Citing three sources familiar with the matter, Reuters said that Tesla would instead focus on a self-driving robotaxi. Tesla CEO Elon Musk said on X, the social media platform he also owns, that Reuters was "lying (again)." Musk subsequently posted on X after the closing bell on Friday that Tesla would unveil the robotaxi on August 8th.

But coming after a first quarter that saw Tesla stock lose nearly a third of its value and serve as the worst-performing stock in the S&P 500, this news capped a rough start to the second quarter for the EV giant.

But the bad week for Tesla started on Tuesday, following the release of first quarter delivery numbers that badly missed Street expectations.

According to Bloomberg data, Tesla reported global deliveries totaling 386,810 in Q1, well below estimates for 449,080. This figure represented a nearly 10% drop from the prior year, when Tesla delivered 423,000 vehicles. Compared to the fourth quarter, Tesla's deliveries fell more than 20%.

This drop also marked the first year-over-year decline in first quarter deliveries since 2020, when the pandemic was beginning in the US.

Tesla's delivery total was also a significant drop sequentially from the fourth quarter, when it delivered a record 484,000 vehicles.

"The discrepancy between deliveries and production implies ~46,000 in incremental inventory, which confirms that beyond the known production bottleneck [in Fremont and Berlin], there may also be a serious demand issue," Deutsche Bank's Emmanuel Rosner wrote in a note following the release.

But just a day before Tesla's disastrous Q1 delivery report, the company actually raised the price of its most popular vehicle, the Model Y.

In the US, Tesla hiked prices on its popular Model Y SUV across all three trim levels by $1,000. Tesla did the same in China, with the Model Y Long Range version rising by 5,000 yuan ($675) to 304,900 yuan and the Performance version also rising by 5,000 yuan to 368,900 yuan.

Tesla then backtracked.

In China, the company began offering new incentives like zero-interest loans with differing lengths depending on down payment amount in addition to free trials of its self-driving software. With the Chinese EV market the most competitive in the world and competitor Xiaomi selling out its first model in 24 hours, Tesla may have to resort to cutting prices again to gin up demand.

The story is the same in the US.

Despite the price hike on April 1 for new orders, numerous Model Ys in Tesla's inventory can be had for thousands of dollars off MSRP. According to Tesla's website, Model Y SUVs in inventory like the rear-wheel drive version are going for $4,600 less than when custom ordered, and Long Range and Performance Model Ys are discounted in some instances by $5,000, depending on location.

All of which makes for a disappointing week for Tesla after a quarter spent disappointing investors.

CFRA analyst Garrett Nelson had been expecting Tesla's next-gen EV model to be a "catalyst" for the stock beaten down this year. The surprise report from Reuters on Friday now challenges this thesis.

And while Musk's refutation on X suggests some details may remain up in the air, steeply cutting prices of existing inventory and boosting incentives in China wasn't exactly the recipe Wall Street wanted to hear to kick off a new quarter for Tesla.

"Demand is slowing, China competition is strong, and then Europe hasn't grown for five quarters now for Tesla," Guggenheim analyst Ronald Jewsikow told Yahoo Finance Live on Thursday.

"Structurally, there's emerging risks in all three regions that, even as we move beyond a very messy first quarter earnings result, there's reasons for concern."

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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