Tesla beat previous records for quarterly vehicle deliveries after cutting its prices. However, analysts warn rising competition and an uncertain economy may dampen the EV maker’s quarter-on-quarter sales growth.

The brand put deliveries at 422,875 vehicles in the first three months, up 4% from the previous quarter and 36% higher year-over-year.

Tesla delivered 6% more Model 3/Model Y vehicles in the first quarter over the fourth quarter. However, the number of deliveries for its higher-priced Model X/Model S vehicles plummeted 38%.

The automaker manufactured 440,808 vehicles in the first three months. Tesla tweeted out that its Texas factory built 4,000 Model Y cars last week. It reported in February that its German plant could produce 4,000 vehicles a week.  

Tesla slashed its prices by as much as 20% in January after missing 2022 Wall Street delivery estimates. Now, the basic Model Y costs $54,990 compared to its previous price of $65,990.

"If they had not cut the price, it would have been ugly. I think what it tells you is the economy is getting tough," Gene Munster, managing partner at Deepwater Asset Management, told Automotive News.