Elon Musk Says Tesla Price Cuts Triggered Demand Wave

Tesla IncTSLA CEOElon Musksaid Wednesday, on the companysfourth-quarter earningscall, that 2023 sales could hit the 2 million vehicle target as demand got a boost from price cuts.

What happened:We think demand will be good despite probably a contraction in the automotive market as a whole. So, basically, price really matters," Musk said on the call.

He said demand was nearly double the production in January, and sales this year could hit 2 million if there was no external disruption.

We're not committing to that, but I'm just saying that's the potential. I think there would be demand for that, too, said Musk.

Why It Matters:Musk said Telsa is making some small price increases on strong demand.

At the beginning of 2023, Teslacut U.S. prices of its vehiclesby up to 19.7%, which allowed both the Model 3 and Model Y to qualify for the new $7,500 EV tax credit. Since then, Model Y's price has been increased by $500.