Tesla Inc on Sunday missed estimates for first-quarter deliveries as a bleak economic outlook and rising competition outweighed the electric automaker’s efforts to prop up demand with price cuts.

Tesla delivered 422,875 vehicles, a record high for the automaker but smaller than analyst expectations for 430,008 vehicles, according to Refinitiv data.

Investors have been watching Chief Executive Elon Musk’s gamble that cutting prices would stimulate sales, making up for the profit hit from eroding margins.

Tesla deliveries grew 4 per cent from the previous quarter and were 36 per cent higher than a year ago.

“Sequential growth continues even in the first quarter,” Martin Viecha, Tesla’s head of investor relations said in a tweet.

The carmaker produced more cars than it delivered, manufacturing 440,808 vehicles for the first three months of this year.

Tesla delivered 6 per cent more of its mainstay Model 3/Model Y vehicles than the previous quarter. But the number of deliveries for its higher-priced Model X/Model S vehicles slumped by 38 per cent.

In January, Tesla slashed prices globally by as much as 20 per cent, unleashing a price war after missing Wall Street delivery estimates for 2022.

Musk warned the prospect of recession and higher interest rates meant the carmaker could lower prices to sustain growth at the expense of profit. In January, Musk said the price cuts had stoked demand.

Shares have soared more than 68 per cent this year on hopes that Tesla would win the price war it started, although the stock remains more than 50 per cent below its November 2021 peak.