AUSTIN: Tesla Inc is offering US$7,500 discounts on Model 3 and Model Y electric vehicles (EV) delivered in the United States this month, its website showed on Wednesday, amid concerns the automaker is facing softening demand as economies slow and EV tax incentives loom.

That is up from the US$3,750 credit it has offered on Model 3 and Model Y vehicles delivered before the end of the year. It has also recently started offering free supercharging for 16,093km for the December vehicles.

The latest discount came just days after the US Treasury Department delayed restrictions on EV incentives until March, meaning Teslas and other U.S-made electric vehicles are likely to qualify for the full US$7,500 credits temporarily.

Customers have canceled their orders and held off their purchases until the new credits take effect in January, weighing on Tesla demand.

Analysts also worry that rising interest rates and CEO Elon Musk's controversial Twitter management could hurt the Tesla brand and sales.

"The fact they seem to be cutting price to increase deliveries volumes doesn’t raise confidence, particularly at a time where we see increasing competition," Craig Irwin, a senior analyst at ROTH Capital Partners, said.

The rare discounts follow a series of price hikes over the past couple of years by the automaker, which blamed supply chain disruption and inflation.

Tesla is also offering US$5,000 credit in Canada on Model 3 and Model Y vehicles delivered before the end of the year. The US automaker has also given a discount of 6,000 yuan (US$860) on some models in China to the end of 2022.

Tesla in October said it would miss its vehicle delivery target this year, but downplayed concerns about demand after its revenue missed Wall Street estimates.

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