He says they risk making new cars unaffordable for consumers.
Musk was speaking after the latest earnings numbers from Tesla on Wednesday (October 19).
The EV maker saw third quarter revenue rise 9% to just over $23 billion.
However, that fell short of analyst estimates, and marked the slowest pace of growth in more than three years.
The company has slashed prices this year in a bid to maintain demand.
But Musk says the ultimate price paid by buyers hasn't actually changed much, once you factor in higher interest rates on finance.
The price cuts have also battered Tesla's profit margins, which fell more than analysts expected.
Looking ahead, Musk is getting cautious on expansion.
He had planned a new factory in Mexico, but now says he's not sure about going "full tilt" on that move.
Tesla's long-delayed Cybertruck also remains a problem.
Musk said there would be "enormous challenges" in reaching profitable volume production for the radically styled pickup.
Tesla shares sank over 4% in after-hours trade following the results, and Musk's wary outlook.
The stock has more than doubled this year as investors bet the firm can ride out any recession better than rivals.
But it's still some 40% off the peak seen in late 2021.
