Tesla Inc. notched another record quarter of vehicle deliveries by a slim margin after cutting prices across its lineup early this year, suggesting orders may have slowed after an initial surge in demand.

The electric-vehicle maker handed over 422,875 cars to customers in the first three months of the year, exceeding its fourth quarter total by about four per cent. The result narrowly beat the average estimate of analysts surveyed by Bloomberg of 421,164 vehicles.

After Tesla lowered the cost of its top-selling Model Y by as much as 20 per cent and lopped up to US$21,000 off its most expensive vehicles in the U.S., Chief Executive Officer Elon Musk said in late January that orders were running at almost twice the rate of production. The figures reported Sunday point to deceleration in demand the last couple months, as the company ended up making almost 18,000 more cars than it sold.

“Continued excess production over deliveries will keep the debate going on price elasticity versus general demand weakness,” Philippe Houchois, a Jefferies analyst with a buy rating on Tesla stock, said in a note.

Tesla shares fell two per cent as of 5 a.m. Monday in New York, before the start of regular trading. The stock has soared 68 per cent this year after a record rout in 2022.

While Tesla continues to outpace other automakers in global EV sales, it's facing a stiffer test than ever before from China's BYD Co., with analysts at BloombergNEF expecting the Berkshire Hathaway Inc.-backed manufacturer to challenge for the No. 1 spot this year.

What's perhaps more important than bragging rights is Tesla's ability to keep growing at rates investors have gotten accustomed to. Last year, the company fell short of its target for 50 per cent average annual increase in vehicle deliveries, expanding by 40 per cent. The number of vehicles handed over in the first quarter was up 36 per cent from a year ago.

“Tesla deliveries were in line with the consensus numbers, but it was a disappointment relative to some of the whisper numbers,” said Gene Munster, managing partner of investment firm Deepwater Asset Management. “They will have to pick up the pace for deliveries for the rest of the year.”

Tesla delivered only 10,695 Model S sedans and Model X sport utility vehicles in the quarter, its most expensive models. That's the lowest combined total for those two since the third quarter of 2021, despite price cuts in both January and early March.

Musk has repeatedly criticized the Federal Reserve's interest rate increases and in December predicted “quite a serious recession” this year. He said then that Tesla may be willing to accept “lower to negative” profits during an economic downturn in order to keep growing at a steady rate.

“With everything going on in the macro environment, these are very good numbers,” said Ben Kallo, a Robert W. Baird analyst with a buy rating on Tesla's stock. “People will switch very quickly from this number to talking about what the margins will be for the first quarter. There's been a lot of focus on price cuts hurting margins.”

Tesla doesn't break out quarterly vehicle sales by region, but the U.S. and China are its largest markets. The company makes the Model S, X, 3 and Y in Fremont, California, and the Model 3 and Y in Shanghai. It also produces the Model Y at its plants in Austin, Texas, and near Berlin.