Tesla's aggressive price cuts may have angered some buyers — but they worked

• Orders for Tesla cars are at its strongest ever year-to-date, Tesla CEO Elon Musk said on a Wednesday call.
• That's thanks to Tesla cutting prices for its electric vehicles earlier in January.

Tesla's massive price cuts are working — orders for the automaker's electric vehicles is at its strongest ever year-to-date, Tesla CEO Elon Musk at an earnings call with analysts on Wednesday.

"Basically, price really matters. I think there's just a vast number of people that want to buy a Tesla car, but can't afford it," said Tesla CEO Elon Musk at an earnings call with analysts on Wednesday, according to a transcript. "And so these price changes really make a difference for the average consumer."

Tesla slashed prices of its vehicles across global markets earlier in January, with up to 20% cut for the Model Y SUV in the US. The move angered Tesla owners who purchased their vehicles before the discounts.

But the price adjustments are spurring demand, with orders coming in at almost twice the rate of production, Musk said on the call.

In response, Tesla has raised the price of its Model Y. The Model Y now costs $500 more at $53,490 — after a price cut of $13,000 earlier this month.

Musk added it has always been Tesla's goal to produce cars that are "affordable to as many people as possible."

Tesla reported better-than-expected results for the fourth quarter ending December 31, with revenue coming in at $24.32 billion, beating analyst's expectations at $24.16 billion, according to the Institutional Brokers' Estimate System data on Refinitiv.

"We think demand will be good despite probably a contraction in the automotive market as a whole," Musk said on Wednesday's call. That's even though he's predicting a "pretty difficult recession this year."

Tesla shares were 5.5% higher at $144.43 in after-hours trade on Wednesday.