As the electric vehicle manufacturer lowered prices to entice more customers in the face of increased competition and a sluggish economy, Tesla Inc.’s first-quarter margins are likely to have fallen to a level not seen in more than three years.

The most valuable automaker in the world, which controls more than half of the U.S. EV market, reduced sticker prices on its vehicles five times between January and April, which increased quarterly sales in the quarter ended March 31 but decreased its top profit margin in the industry.

According to 17 analysts surveyed by Visible Alpha, Tesla is anticipated to report vehicle gross margin of 23.2% for the quarter, down from a record 32.9% a year earlier and the lowest since the fourth quarter of 2019.

According to 17 analysts surveyed by Visible Alpha, Tesla is anticipated to report vehicle gross margin of 23.2% for the quarter, down from a record 32.9% a year earlier and the lowest since the fourth quarter of 2019.

On Friday, the business lowered rates in Singapore, Singapore, and Europe. Since the beginning of the year, Tesla has decreased the cost of its base Model 3 by a total of 11% in the United States, and its base Model Y has seen a 20% decrease.

It has been put under pressure as rivals like Ford Motor Co (F.N) have increased competitiveness at home, even as customers cut down on spending due to recession concerns, and as it is lagging behind BYD in China, its second-largest market.

According to internet posts and workers, Tesla’s Shanghai manufacturing experienced issues on Monday after employees were notified of the company’s plans to reduce their performance bonuses, which are based on the operation of the production.

A production increase at its factories in Austin, Texas and Berlin, according to the business, run by billionaire Elon Musk, will assist to increase profits because of economies of scale.

Tesla is also probably going to profit from a drop in lithium prices this year, particularly in China, where a drop in EV demand has led to stockpiles of the metal.

Based on the drop in material prices, it is likely that Tesla’s margins will be sustained, according to Canaccord Genuity analyst George Gianarikas.