Tesla has built affordable car models to combat sales declines globally. Despite a drastic drop in quarterly sales, the company’s profit margins on car production exceeded expectations. Tesla shares fell by nearly 5% in after-hours trading.

Analysts predict Tesla will face challenges in the EV market, especially with competition from Chinese manufacturers. Despite earnings falling slightly below expectations, Tesla’s gross margins surpassed estimates. Investors remain optimistic about Tesla’s future, particularly in robotics and AI-powered transportation.

Recent numbers suggest Tesla may have weathered the worst of its struggles, with potential for improvement in the auto business. Despite facing challenges in Q2, Tesla’s margin decline is less severe than anticipated. The company’s strategic moves, like entering the Indian market and focusing on the Model 2, could lead to a stronger second half of the year.

Read more at Yahoo Finance: Tesla says it started building initial versions of an affordable car, posts a steep sales decline