Missing $1.4 Billion Brings Tesla’s Accounting of Assets and Spending Under New Scrutiny

The accounting of Tesla’s capital spending and assets, particularly what appears to be a missing $1.4 billion, are prompting new questions about spending by the company and its uber-wealthy CEO Elon Musk.

Musk has always touted Tesla’s robust capital spending as one of the company’s key strengths and a big advantage over any and all competitors, not only in the automotive business but also other fields such as robotics and artificial intelligence.

But the financial anomalies are leading to calls for a closer look

Money vanishes on Tesla’s books

The heart of the story comes from a report by the Financial Times which suggests nearly $1.4 billion is missing from Tesla’s accounts. The publication states it  looked into Tesla’s cash flow statements and capital expenditures over the last 6 months of 2024 and compared it to the company’s valuation of the assets it had acquired. The report found anomalies, namely the missing $1.4 billion.

In the third and fourth quarter of 2024, Tesla reportedly spent $6.3 billion on “purchases of property and equipment excluding finance leases, net of sales” according to its cashflow statements.

However, on Tesla’s balance sheet for the same period, the company reported that the gross value of property, plant and equipment went up by only $4.9 billion to $51 billion, according to Times.

Musk talks up spending on everything but cars

Tesla is in the process of updating its best-selling vehicle line, the Model Y, in China. The changes subsequently will appear in the U.S. version. But the company has not introduced an all-new EV since the November 2023 launch of Cybertruck, even as competitors aggressively roll out new all-electric offerings. It has continued to delay the long-promised second-generation Roadster. And Musk has repeatedly revised his position on launching an all-new, entry-level EV. In China, according to reports, it is just preparing a stripped-down version of the Model Y.

Musk has made no secret, particularly on his quarterly calls with analysts and investors, that he is investing heavily in non-automotive projects such as robots and AI with money from Tesla. At one point he boasted about major purchases from Nvidia, a major maker of the silicon chips which drive Tesla’s AI systems. Even before word of the accounting anomaly was published, some analysts and investors had begun raising questions about the ownership and use of the chips, which appeared to have been purchased from funds from Tesla but shifted to other ventures backed by Musk.

As the margins from the company’s automotive business decline, Tesla also has become more dependent on cash from its thriving energy storage operations and is pouring money from that business for new plants in Shanghai and Texas. It also recently open a plant for refining lithium in Texas.

Repeated changes to business plans

Additionally, Musk continues to have changed Tesla’s business plans on several occasions.  In 2023, he began touting a low-cost Tesla, which could appeal to a wider segment of the public and be built at a new plant in Mexico.

But last year, Musk stopped talking about the low-cost Tesla from Mexico.  He instead began emphasizing, in a lavish Hollywood production, a robotaxi, which he maintains could serve as an entirely new market for Tesla-make products and its self-driving technology. It is promised for sometime in 2026.

At the same time, sales of the once highly-touted Cybertruck have fallen far short of Musk’s early predictions. Analysts say that’s largely because its styling and capabilities failed to ignite much interest among truck lovers across the United States or in export markets dominated by traditional brands such as Chevrolet and Ford. Musk’s recent forays into politics haven’t helped either and made Cybertrucks a target for protest.

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Trucking

Tesla’s move into building electric-powered semi-trucks also has yet to generate significant traction at a time when fleet managers have shown great reluctance to electrify.

That has further led to Tesla’s use of capital coming under more intense scrutiny at a time when Musk’s behavior – and managerial skills – has been put under a very bright spotlight.

This week reports surfaced that President Donald Trump’s inner circle have become increasingly concerned about Musk’s off-the -cuff remarks to interviewers and podcasters on topics such as Social Security. Musk’s close ties to the Chinese government also are under new scrutiny after it was reported he had asked for a highly-classified briefing on the U.S. Defense Department’s planning for a possible conflict with China.