This file photo shows a Tesla’s Model 3 car at an exhibition.

Facing economic headwinds and mounting competition, Tesla this year has aggressively cut vehicle prices in several regions and is resorting to the traditional automakers' tactic of offering incentives to clear inventory, analysts said.

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On Tuesday, CEO Elon Musk told shareholders Tesla will try advertising for the first time, a move analysts said could drum up demand. Musk warned Tesla was not immune to the global economy, predicting it will be difficult for the next 12 months.

Tesla slightly raised prices of some new models twice this month in the US, although prices remain much lower than they were before the price cuts began this year.

CEO Elon Musk

Tesla now offers discounts of more than $1,300 on some Model 3 cars, up from the $250 discounts earlier this month on some Model Y and Model 3 vehicles, according to the website. As of Friday, the $250 discount was no longer offered on Model Y.

US prices for Model 3 start at $40,240 and Model Y at $47,490.

"Tesla is beginning to rely on incentives in the same manner traditional automakers have when their dealer inventories begin to spend too much time on the lot," said Edmunds.com director of Insight Ivan Drury, adding the incentives "signal that Tesla has begun to slightly oversupply the market."

Tesla plans to launch a revamped version of its Model 3 sedan this year to refresh its aging product lineup. The price cuts to drive up sales volume reflect pressure Tesla faces from competition and an aging product lineup, rival Ford Motor Co CEO Jim Farley said last month.