Tesla stock lost ground on Monday as investors responded to a pair of potentially negative developments.

The electric-vehicle maker is delaying a lower-cost version of its Model Y, Reuters reported on Friday. Also, Tesla is being sued for allegedly speeding up its odometers to avoid warranty claims. It has denied the lawsuit’s core assertions.

The question for investors is whether either will affect the stock. Odometers almost certainly won’t, but the delay of the lower-price model very well could.

Investors can follow both issues when Tesla reports first-quarter earnings on Tuesday evening.

On the first day after the long Easter holiday weekend, the stock fell 5.8% to $227.42, while the S&P 500 and Dow Jones Industrial Average dropped 2.4% and 2.5%, respectively.

Coming into the week, shares were down about 38% since Tesla reported its fourth-quarter earnings on January 29.

For the first quarter, Wall Street is expecting earnings per share of approximately 39 cents, according to FactSet, down from 45 cents in the first quarter of 2024. Estimates have been decreasing since the company reported first-quarter deliveries of approximately 337,000 vehicles, down from 387,000 a year ago and about 40,000 fewer than Wall Street had projected.

Earnings results and what company management says about the year ahead should drive the stock's movement this week. Investors can keep an eye on odometers.

Earlier in April, Nyree Hinton filed suit against Tesla alleging the company manipulated the odometer to avoid warranty claims, saying the odometer ran too fast, adding mileage. Tesla didn't respond to a request for comment. CEO Elon Musk responded to a tweet over the weekend calling the issue "idiotic."

Tampering with an odometer is serious. It's a crime. The National Highway Traffic Safety Administration estimates it costs car owners $1 billion annually. Typically, the form of the fraud is car owners rolling back mileage to get a better price on resale.

Given Musk's response, he sounds confident there is no systemic issue with Tesla odometers. Tesla's warranty expense doesn't raise a red flag. The company's warranty provision in 2024 was $2.7 billion, representing approximately 3.5% of its automotive sales of $77 billion. The 2023 provision was $2.3 billion.

The amounts look normal. General Motors' provision and adjustments to existing warranties totaled approximately $3.9 billion in 2024, accounting for about 2.3% of automotive sales.

GM, Ford Motor, andStellantis have faced consumer lawsuits about data collection, parts, and safety risks.

Investors who want to know what’s behind big drop should focuse more on low-price models. Investors expect a new model starting below $30,000 to help boost sales this year. Tesla delivered 1.8 million cars in 2024, flat with 2023.

A lower-priced version of the Model Y is being paused, but investors don’t expect a cheap Model Y to be the new model. Investors are looking for a new form factor—possibly something along the design of the company’s Cybercab.

The uncertainty isn’t helping shares. Fortunately, investors don’t have long to wait for clarification.