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The earnings report generally presented a troubling picture, with key metrics falling short of expectations. Most notably, average selling prices (ASPs) for Tesla vehicles have declined, indicating that customers are paying less than they used to for their cars. While this shift might raise alarms, it also opens up the market for more buyers eager to snag good deals.
James highlighted that decreased ASPs may correlate with Tesla owners opting for fewer add-ons to their vehicles, alongside generous referral incentives. Although not all incentives have been recorded as liabilities on the balance sheet yet, they do represent a deferred cost that will impact future financial outlooks.