11:56 AM EST, 03/06/2024 (MT Newswires) -- Tesla's (TSLA) first-half results could come in below expectations on profitability amid a challenging year for electric vehicles, Morgan Stanley said in a report.

"If there was ever a time for Tesla to potentially post a GAAP EBIT loss in the auto business, it may be this year," Morgan Stanley said, pointing to decelerating EV demand in key markets and an over-supplied China EV market.

Morgan Stanley expects Tesla to pull back on price cuts to defend its margins and cash flow in response to falling profitability.

"However, we still forecast Tesla FY24 FCF of