Tesla slashed prices on two of its most expensive U.S. models, as it continues the trend of discounting its vehicles to drive up demand.

Days after CEO Elon Musk spoke at Tesla's Investor Day praising price cuts to other models and their effect on demand, the company discounted two of its higher-priced vehicles -- the Model S and Model X.

Starting at $99,990, Tesla's premier Model X will see a striking 9% reduction, while its Model S will now start at $89,990, a 5% discount. Both models offer lines with expanded all-wheel drive (AWD) as well, with Tesla discounting the Model X AWD by nearly $10,000 and the Model S AWD by around $5,000, according to its website.

Tesla also offers a premium "Plaid" version of its Model S and Model X series, featuring base AWD and increased acceleration. Plaid buyers will see price tags as low as $109,990, marking a 4% discount.

"The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla," Musk said last week at the annual conference.

The price cut is Tesla's fifth pricing change in 2023, notably cutting prices by as much as 20% across all models in January. That sale made many Tesla vehicles eligible for Biden's $7,500 electric vehicle (EV) tax credit, further incentivizing demand.

Many view Tesla's recent spurt of price cuts as the beginnings of an EV pricing war, as the longtime market leader feels its presence threatened by the explosion of automakers developing their own gas alternative models.

"The price cuts Tesla has already implemented globally has catalyzed demand by 30% out of the gates as this latest price cut is another smart move," Wedbush Securities managing director of equities Dan Ives told CNBC. "This is an EV arms race playing out and Tesla has the margins to make price cuts and still be well above other automakers."

Musk has been adamant about driving up demand for his vehicles, especially following reaction to last week's Investor Day. Despite Musk's enticing vision for the long-term outlook of the company, the short-term has left many investors weary as the competition begins to heat up.

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