Tesla Inc TSLA chairman Elon Musk said Wednesday, at the company Fourth Quarter Results It says sales could reach the target of 2 million vehicles in 2023 as demand received a boost from price cuts.

What happened: “We expect demand to be good despite a likely contraction in the overall auto market. So basically price is what really matters,” Musk said on the conference call.

He said demand is nearly double January’s production and sales could reach 2 million this year barring external disruptions.

“We’re not committing to that, but I’m just saying, that’s the potential. I think there would be a demand for that, too,” Musk said.

See also: Everything you need to know about Tesla (TSLA) stock

Why it matters: Musk said Telsa is making some “small price increases” due to strong demand.

Early 2023 Tesla lowered US prices for its vehicles by up to 19.7%, allowing both the Model 3 and Model Y to qualify for the new $7,500 EV tax credit. Since then, the Model Y’s price has increased by $500.

Tesla CFO Zachary Kirkhorn said auto profit margins, which fell to a two-year low of 25.9% in the fourth quarter, would remain above 20%. He said average prices for all models would remain at $47,000.

Tesla’s fourth-quarter revenue of $24.32 billion beat the market estimate of $24.16 billion. Earnings per share of $1.19 also beat a Wall Street estimate of $1.13.

Vehicle production rose 44% to 439,701 units, while deliveries rose 31% year-on-year to 405,278 vehicles.

Price promotion: Tesla shares rose 5.5% to $152.39 in extended trading after closing 0.4% higher on Wednesday Benzinga Pro data.

Continue reading: Trading strategies for Tesla shares before and after Q4 results