The Elon Musk-led company's shares, which have more than doubled so far this year, fell 1.5% in trading before the bell as investors worried that the price cuts could further hit margins, already hovering near four-year lows.

Data firm Visible Alpha expects Tesla to post automotive gross margins of 19.1% in the third quarter when the company reports results on Oct. 18.

Tesla posted a record high margin of 32.9% in the first quarter of 2022, but those have steadily fallen since.

The Model 3 sedan is cheaper by $1,250 to $38,990, while prices of the Model Y long-range variant were cut by $2,000 to $48,490, the car company's website showed on Thursday.

Prices for the standard Model 3 have come down by about 17% since the beginning of the year while the Model Y long-range variant has seen a drop of over 26%.

The price drops for the Model 3 also come as deliveries of its refreshed and higher-priced standard version is expected to start in the fourth quarter.

The carmaker missed market estimates for third-quarter deliveries earlier this week after planned upgrades at its factories to roll out the newer version of the Model 3 mass-market sedan forced production halts.

Tesla on Thursday also cut prices for its higher-priced variants of Model Y and Model 3.

The price for the base Model Y rear-wheel drive, which Tesla reintroduced earlier this week, remained the same at $43,990.

Prices for the premium Model S and Model X did not change on Thursday.