Tesla Faces Scrutiny Over $1.4 Billion Accounting Discrepancy

A recent report from the Financial Times has raised significant concerns regarding Tesla’s accounting practices, revealing a $1.4 billion discrepancy that has caught the attention of analysts and investors alike.

Experts have long scrutinized Tesla’s financials; however, the lasting credibility of these concerns has now been amplified by the Financial Times’ detailed examination of the company’s expenditures.

According to the report, Tesla reported capital expenditures of $6.3 billion in the second half of 2024 for property and equipment purchases. Meanwhile, it only recorded a $4.9 billion increase in property, plant, and equipment, leading experts to question the accuracy of these figures.

Financial Times has raised significant concerns regarding Tesla’s accounting practices

Unlike standard practices, where capital expenditures and asset growth align closely, Tesla’s case presents an unusual outlier with no clear explanation, as the company has not disclosed substantial asset sales or impairments that would justify the difference.

Adding to the skepticism, Tesla has reported holding $37 billion in cash while simultaneously raising $6 billion in new debt last year. While not entirely uncommon, this tactic raises eyebrows considering the company’s cash reserves, especially during an economic climate where caution is paramount.

Furthermore, despite posting a remarkable $15 billion in operating cash flow, Tesla has not offered any share buybacks or dividends to its investors, a stark deviation from industry norms.

This has further fueled comparisons to past financial scandals, such as Wirecard, igniting fears among finance experts like Jacek Welc from SRH Berlin University of Applied Sciences.

As the Financial Times report circulates, pressure mounts on Tesla and its auditors to clarify these substantial discrepancies. While there may be explanations for these unconventional accounting measures, increased scrutiny could have implications for the company that has long thrived on its innovative reputation and industry-leading position.