Elon Musk gave Tesla investors the one thing they've been demanding — and it worked brilliantly

• Elon Musk has said Tesla will get cheaper electric vehicles out sooner.

• The move came after Tesla lowered prices amid falling sales and increasing competition.

• Tesla's first quarter was marked by fewer deliveries, layoffs, and a stock rout.

Elon Musk dangled a long-awaited prize — cheaper Tesla models — in front of investors on Tuesday. It sent stock soaring.

In Tesla's highly anticipated first-quarter earnings call, CEO Musk talked about the company's efforts to accelerate the production of cheaper electric vehicles. Investors have been clamoring for cheaper cars for months amid falling sales of current models.

Musk didn't give many specifics, such as how much the cars would cost or exactly when they'd be available. But it was enough to calm investors, and Tesla's stock rose 13% in after-hours trading.

"If you have a great product at a great price, the sales will be excellent," Musk said on the call.

He said Tesla planned to keep making its cars and prices more competitive. Carmakers around the world, including the once-dismissive Musk, are worrying about the low prices of Chinese EVs undercutting their sales.

Tesla's cheaper models are set to be produced on existing manufacturing lines. Musk said production could start late this year or in early 2025 instead of the second half of 2025 as previously mentioned.

Tesla's cheapest car in the US is the Model 3, starting at $38,990, which it sold 220,910 of last year. The average price of the top 10 EVs in the US is $53,758.

Analysts were cautiously optimistic about Musk's announcement.