Financial statements from Elon Musk’s electric car maker Tesla, whose sales and share price have fallen sharply, have raised questions among analysts at the Financial Times. When they compared Tesla’s capital expenditures for the last six months of 2024 with the valuation of the assets on which the money was spent, they found a $1.4 billion discrepancy that was not explained.
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That’s a hefty sum for a company whose market cap has fallen from $1.7 trillion to less than $800 billion. It also raises questions about Tesla’s cash flow statement, which might prompt investors to ask, for example, why the company, with $37 billion in cash, borrowed another $6 billion last year.
The Financial Times noted that in the third and fourth quarters of 2024, Tesla spent $6.3 billion on “purchases of property and equipment, excluding finance leases, net of sales,” according to its cash flow statements. However, on the balance sheet, the gross value of property, plant, and equipment increased by only $4.9 billion to $51 billion during that period. There are no sales or “significant” impairments to account for the missing $1.4 billion.
Currency fluctuations are unlikely to cause such a difference in reporting. Tesla makes cars in the US, China and Germany, and although the euro weakened against the dollar during this period, four-fifths of Tesla’s “long-term assets” are in the US.
The details of the “lost” assets may emerge in the next quarter. If they don’t, the question of what Tesla does with its cash and where it is stored may become more pressing, the Financial Times writes.
It should be added that Tesla is investing heavily in development, especially in AI infrastructure. The company predicts that its annual spending over the next few years will exceed $11 billion. It is also worth noting that recent decisions by the White House will allow Tesla to increase sales, and some potential buyers may be delaying purchases in anticipation of the updated Model Y appearing in showrooms.