Tesla is in deep trouble. The embattled EV maker has seen sales plummet worldwide in large part due to its CEO Elon Musk's highly polarizing behavior.
Tesla's share value has also dropped precipitously, down over 37 percent year to date, wiping out all gains made since Musk's key ally Donald Trump was elected last year.
Even the company's financials are now sprouting some glaring questions. As the Financial Times reports, a whopping $1.4 billion appears to have vanished in thin air. The enormous hole arises when examining the carmaker's capital expenditures and how those compare to the reported rise of the value of its assets.
According to Tesla's cashflow statements, the firm spent $6.3 billion on "purchases of property and equipment excluding finance leases, net of sales" in the second half of 2024. However, its balance sheet claims the gross value of property, plant, and equipment rose by only $4.9 billion — leaving an eyebrow-raising $1.4 billion discrepancy.
The news couldn't have come at a worse time, with furious investors accusing Musk of abandoning Tesla by spending most of his time rampaging through the government with the help of his so-called Department of Government Efficiency.
The optics are certainly bad — but it's technically possible there's a reasonable explanation. Wharton School professor of accounting Luzi Hail told the FT that it's entirely possible Tesla "sold off some [property, plant, and equipment] and we do not know what the net book value (the respective gross amounts) were."
Other factors that could explain the difference could be unknown "mergers and acquisitions transactions and foreign currency transactions," according to Hail.
However, Tesla's reported figures don't disclose any sales amounting to the missing $1.4 billion — making it hazy how it could be explained unless there was an egregious accounting error.
The $1.4 billion is a massive outlier, even for Tesla's own books, which haven't shown anywhere near as big of a discrepancy over the last five years, according to data analyzed by the FT.
Tesla has also raised billions of dollars worth of new debt, suggesting optimism about new capital investments.
But considering the sheer amount of protests and vandalism the EV maker has attracted as of late, Tesla will likely may have to do more damage control this year than it anticipated.
Investors, for one, are livid. Ross Gerber, one of the carmaker's earliest investors, told Sky News that he thinks Musk should step down.
"I think Tesla needs a new CEO and I decided today I was going to start saying it and so this is the first show that I'm saying it on," Gerber said. "It's time for somebody to run Tesla. The business has been neglected for too long."
The company's notably absent leader has instead cracked the whip, infamously threatening to fire government workers unless they send him a document of what they had done last week — a glaring double standard, considering how seemingly little he has done for Tesla as of late.
"Elon needs to send stockholders five bullet points about what he’s done for the company last week by midnight or be considered to have resigned," one Reddit user joked in response to the latest news.
"Maybe Tesla needs a [Department of Tesla Efficiency] to root out the fraud and theft," another user added.
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