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NEW YORK: Tesla beat quarterly revenue expectations on Wednesday, but said gross margin fell in the second quarter from the previous three months, squeezed by the electric-vehicle maker’s efforts to boost sales through price cuts.

Shares of the Austin, Texas-based automaker rose 2% after briefly falling 2% in trading after the bell.

Under pressure from increasing competition and an uncertain economy, Tesla has cut prices and increased discounts and other incentives to reduce inventory.

Tesla said in a statement on Wednesday it was focusing on reducing costs and on new product development, and that the “challenges of these uncertain times are not over.”

Recently, a lack of new models has made it tougher for Tesla to take on rivals in China, where glitzier offerings from local players have weighed on demand.

Lower pricing, along with government tax breaks for EV buyers in the United States and elsewhere, drove Tesla’s deliveries to a record 466,000 vehicles in the April-July period globally, but ate in to the profitability of the company whose margins have long been the envy of the auto industry.

The company on Wednesday reported gross margin of 18.2% for the April-June period - the lowest in 16 quarters - compared with 19.3% for the first quarter.

On an adjusted basis, Tesla earned 91 cents per share. Analysts had expected a profit of 82 cents per share, according to Refinitiv IBES data. It was not immediately clear if the numbers were comparable.

The company reported revenue in the April-June period of $24.93 billion, compared with estimates of $24.48 billion, according to Refinitiv data.

Tesla CEO Elon Musk in April doubled down on the price war, signaling the company would prioritize sales growth ahead of profit in a weak economy and amid rising competition.

Tesla’s share price has more than doubled this year, helped by rival automakers backing Tesla’s charging standard, as well as expanded federal credits for Model 3s and investor excitement over artificial intelligence.

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