April 2 Reuters Tesla Inc on Sunday posted record quarterly vehicle deliveries, but quarteronquarter sales growth was modest despite price cuts as rising competition and a bleak economic outlook weighed.

Tesla delivered 422,875 vehicles for the first three months of this year, up 4 from the previous quarter. This was 36 higher than a year ago. In January, Chief Executive Elon Musk said Tesla could achieve 2 million vehicle deliveries this year, up 52 from last year.

Investors have been watching Musk39;s gamble that cutting prices would stimulate sales, although they worry about eroding margins.

In January, Tesla slashed prices globally by as much as 20, unleashing a price war after missing Wall Street delivery estimates for 2022. The basic Model Y that used to sell for 65,990 now costs 54,990.

If they wouldn39;t have done the price cut, 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, said on Sunday.

They showed an acceleration, but they didn39;t accelerate to the level that Elon had suggested it would.

Musk, who has missed his own ambitious sales targets for Tesla in recent years, said in January that 2023 deliveries could hit 2 million vehicles, absent external disruption, from 1.3 million in 2022.

The firstquarter deliveries compare with analyst expectations of 430,008 vehicles, according to Refinitiv data based on seven analysts.

According to a mean of estimates…