In the second half of 2024, Tesla reported $6.3 billion in capital expenditures (capex), according to its cash flow statement. However, its gross asset value—excluding depreciation—only increased by $4.9 billion, revealing a $1.4 billion discrepancy that has no clear accounting explanation. The discrepancy was first reported by the Financial Times and picked up by Fortune, which notes that for a company primarily operating in the United States, these values should match.
Tim Morrison, an accounting professor at the University of Notre Dame and a former audit partner at Ernst & Young, told Fortune that under normal conditions and without recognised asset sales or impairments, as is the case here, capex and gross asset values should align. According to Morrison, “If the numbers were off, that would be a red flag about internal controls.”
He also said factors such as currency fluctuations could play a role, though the Financial Times disputes this explanation, given that four-fifths of Tesla’s long-lived assets are in the United States.
Tesla did not respond to Fortune ‘s requests for comment, and its external auditor, PwC, also declined to comment. PwC has audited the company’s financial statements since 2005. The lack of explanation from both entities has raised questions among analysts about the transparency and traceability of the investments, at a time when Tesla claims to be betting on emerging technologies such as artificial intelligence and robotics.
Possible technical explanations without official confirmation
According to Morrison, one technical reason could be the full depreciation of old assets that were removed from the balance sheet, as he explained to Fortune. In that case, the asset’s value and its accumulated depreciation are removed from the accounting records without generating a loss, which would reduce the net asset value even though money has been invested in new ones. He also mentioned that exchange rate fluctuations can affect the recorded value of assets in various international markets. However, there is no evidence that these factors fully explain the difference.
The Financial Times maintains that currency effects “seem unlikely” as the primary explanation. The report also clarifies that Tesla did not sell assets or report impairments on its long-lived assets during the period analyzed, ruling out other common causes of discrepancies. Investments in AI and robotics are also not accounted for as property, plant, and equipment (PP&E) if they correspond to software or operating expenses, which may also explain part of the discrepancy.
Investments in artificial intelligence and financial pressure
During the January 2025 earnings call, Tesla CFO Vaibhav Taneja claimed the company had surpassed $5 billion in cumulative AI-related investments, part of an annual capex that reached $11.3 billion, according to Fortune. Taneja said the company is seeking efficiency in its capital spending and that funds are being allocated in a “targeted” way to deliver immediate benefits. However, he did not offer details on how those investments are reflected on the company’s balance sheet.
Despite having a cash reserve of $36.5 billion, Tesla opted to issue $3.9 billion in new debt in 2024. This decision surprised analysts, according to the Financial Times, considering that the company does not distribute dividends and theoretically would not require additional financing. The situation has raised questions about the company’s long-term financial strategy, whose stock market value has fallen significantly in recent months.
Falling stocks and protests
The FBI is investigating a series of attacks on Tesla facilities, including fires in Las Vegas and other US cities, according to Bloomberg. The vandalism comes amid a growing public backlash against Musk’s political involvement. During an internal meeting on March 21 in Austin, Texas, broadcast on his X network, Musk asked employees not to sell their shares and assured them that “the future is bright and exciting,” despite the fact that the stock has fallen nearly 40%.
At the same meeting, Musk reiterated his commitment to developing autonomous vehicles and the humanoid robot Optimus, according to Bloomberg. He said the first models could be sold to employees in 2026 and that production of the future autonomous “Cybercab“ will be scaled up. The company also plans to launch new, more affordable electric vehicles in the first half of 2025, though it hasn’t detailed features or a precise timeline.