Tesla (NASDAQ:TSLA) shares fell nearly 7% pre-market today after the company reported its Q1 results that came in worse than the Street estimates as it was hurt by price cuts.

Q1 EPS was $0.85, compared to the Street estimate of $0.86. Revenue came in at $23.3 billion, compared to the Street estimate of $23.78 billion.

Gross margins dropped to 19.3% from 29.1% in Q1/22, missing the Street estimates of 21%. Tesla has cut prices on its electric vehicles globally, including in the US where it reduced prices for the sixth time this year to stay competitive.

The company reported manageable operating margins despite the first-quarter price reductions and anticipates further cost cuts through improved production efficiency and reduced logistics costs.

Tesla plans to produce 1.80 million cars this year, slightly lower than Street estimates and expects to remain ahead of the long-term 50% CAGR with around 1.8 million cars in fiscal 2023.