Elon Musk’s car manufacturer is not going through Your best moment financial with their actions falling into chopped For weeks. As if that were not enough, Dan McCrum, the journalist who uncovered the Wirecard fraudhas highlighted a possible hole of 1.4 billion dollars in the accounting of Tesla. The news has sat like a jug of cold water among Tesla investors, already upset by the crisis that has caused the political decisions of his CEO Doge front.
This discussion potential has unleashed a series of questions about transparency and Reliability of financial information which provides Tesla. If this unraveling in the cash flow is not resolved quickly, it could have reputational consequences for the future of the company and the perception that investors have about the management of Elon Musk in front.
The black hole: 1.4 billion dollars without explanation. The journalist published a complete finding analysis in it Financial Times which has exposed a gap of 1.4 billion dollars in the Tesla cash flow. According to McCrum, Tesla has put all the meat on the ASADOR of the AI and plans to make investments worth 11,000 million dollars annually in developing Infrastructure for Ia.
That leads to its cash volume in cash is greater than usual. Within the framework of these planned investments, in the third and fourth trimester combined of 2024, Tesla spent 6,300 million dollars in “Purchases of Properties and Equipment, excluding financial leases, net sales”, according to the cash flow states published in their accounts. However, in the balance sheet, the gross value of property, plant and equipment only increased 4.9 billion dollars in that period, to reach 51 billion dollars. That leaves a unravel between spending and assets of 1.4 billion dollars.
The accounts are audited. As the vast majority of large companies, Tesla accounts are audited by external consultants. PWC takes care of these audits since 2005. Several accounting experts confirmed to Fortune that there are plausible justifications for this unraveler that could not be reflected in the financial statements of Tesla. However, it is expected that the relevant figures coincide for a company where sales have fallen but does not show serious problems in their assets, pointed to Fortune Tim Morrison, accounting professor at Notre Dame and Audit Socy of the consultant EY. PWC He has audited Tesla’s finances since 2005.
“If they had incorrect numbers, then that would be an alert signal related to audit controls,” said Morrison calling for caution. We will have to see if PWC or the company offers some clarification, “he told Fortune Garrett Nelson, vice president and actions analyst of the CFRA Research consultant.
Warning signs that Tesla should clarify. Luzi Hail, accounting professor at the Wharton School, stood out in the Financial Times That “the reason why the reported figures do not completely fit in most cases is that we only see the net changes in these accounts, but we do not have all the detailed transactions that have been carried out. Perhaps part of these assets were sold and we do not know their net accounting value.”
Dan McCrum highlighted in his article that this unraveling could well be corrected in an accounting adjustment in the next quarter due to the gap in the annotation of the values. Last year, Tesla generated 15,000 million dollars of operating cash flow. He invested 11,000 million dollars in his businesses and did not pay dividends or repurchase shares with his bulky liquidity. However, Tesla also raised $ 3.9 billion of new financing, in addition to the 2.6 billion dollars of 2023.
However, the journalist warns that it could be an alert signal that has already been seen previously in cases like Wirecard, so Tesla should offer A convincing answer To those accounting doubts.
Tesla’s past ghosts. This is not the first time that Elon Musk is accused of manipulating the company’s figures. In the past, suspicions have already emerged about the way in which Tesla presents its financial results and about the veracity of its growth projections.
This situation inevitably evokes Enron’s memory, the energy company that was declared in bankruptcy in 2001 after uncovering an accounting fraud of gigantic proportions. As the CEO of Asana points out In the article of Fortune“Tesla could be the next Enron” if it is confirmed that Elon Musk has deceived customers and investors.
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