Tesla Inc shares tanked after the luxury electric car maker started offering $7,500 discounts on Model 3 and Model Y vehicles delivered in the United States this month, fueling concerns the company is facing softening demand as economies slow.

On Dec.1, Tesla started offering a $3,750 “credit” on Model 3 and Model Y vehicles delivered before the end of the year. It raised the credit to $7,500 on Wednesday. It also recently started offering free supercharging for 10,000 miles (16,093 kms) for vehicles delivered in December.

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

Shares of Tesla ended down 8.9 per cent, heading for their worst month ever as worries grow over softening demand for electric cars and Chief Executive Elon Musk’s distraction with Twitter, which he purchased in October.

Tesla underperformed the broader market, which fell as data showing a resilient economy fueled worries over the Federal Reserve’s path on hiking interest rates.

Musk said on Thursday that he foresees the economy will be in a “serious recession” in 2023 and demand for big-ticket items will be lower.

Analysts have reduced their estimates for Tesla’s vehicle deliveries for the current quarter, reflecting slowing growth in key markets like the United States and China.

“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.