© Reuters. FILE PHOTO: Tesla electric vehicles (EVs) fast-charge using Tesla Superchargers at a Buc-ee’s travel center and gas station in Baytown, Texas, U.S., March 18, 2023. REUTERS/Bing Guan

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By Akriti Sharma and Abhirup Roy

(Reuters) -Tesla cut prices in the United States between 2% and nearly 6%, its website showed on Thursday, as the company extends a discount drive on its electric vehicles that analysts caution could hurt profitability.

The fifth such cut in Tesla (NASDAQ:TSLA)’s largest market since the start of the year comes as the United States prepares to adopt tougher standards this month that are expected to limit EV tax credits.

Tesla cut prices on both versions of its Model 3 sedan by $1,000 and on its Model Y crossover by $2,000, the website showed. It also cut prices on both versions of its more expensive Model S and Model X by $5,000.

The company has said the tougher U.S. standards would reduce the $7,500 tax credit available for its base, rear-wheel drive Model 3 since January.

Some analysts who expected the further price cuts had flagged concern that Tesla’s industry-leading profit margins could be at risk.

This week Tesla reported first-quarter deliveries of almost 423,000 vehicles, up just 4% from the prior quarter after price cuts in the United States, China and other markets aiming to spur demand.

Tesla has set a target of 1.8 million deliveries this year.

Tesla has cut the price of its base Model 3 by a cumulative 11% since the start of the year, with a 20% reduction on its base Model Y.