Tesla Inc's shares sank 8% on Thursday and dragged down other automakers after Chief Executive Elon Musk signaled the electric-vehicle maker will keep cutting prices to drum up demand even after taking a big hit to profitability.

Tesla shares were trading at $168 before the bell, with at least 15 analysts lowering their price targets on the stock. The company was set to lose nearly $50 billion in market value, if losses hold.

"Facing a volatile macroeconomic backdrop and weakening demand, Tesla continues to prioritize units over near-term profits," said analysts at Canaccord Genuity.

Tesla's gross margins fell to a more than two-year low in the first quarter and missed market estimates, after the company kicked off a discounting drive in January to defend its dominance in the U.S. and make inroads in key market China.

Musk suggested more cuts ahead, saying the company that has cut slashed prices six times so far this year will put sales growth ahead of profit in a weak economy.

That spooked investors, who dumped automakers from Europe to the U.S. on fears that margins will be sacrificed for maintaining share in a market that is slowing this year due to economic uncertainty.

"Long-term we believe this (Tesla's price cuts) is the right strategy and leverages their cost leadership position. However, this does not come without pain as we now believe margins will get worse before they get better," RBC analyst Tom Narayan said.

U.S. automakers ranging from Ford Motor Co to startups such as Lucid Group Inc fell between 0.7% and 2.8%.

France-based Renualt, whose finance chief said the company will not drastically cut prices on its EVs amid Tesla's downward "spiral", was down 7%, while Germany's Volkswagen fell 3.3%.

(Reporting by Aditya Soni; Editing by Shounak Dasgupta)