On March 19, 2025, the Financial Times, a prominent British daily newspaper, released a report concerning the financial practices of Tesla, the electric vehicle company owned by Elon Musk. This report highlighted a purported discrepancy of $1.4 billion between Tesla’s capital expenditures and the valuation of the assets those funds were meant to cover over a six-month period.
However, just a week later, on March 25, the Financial Times issued a clarification acknowledging a miscalculation related to the alleged $1.4 billion gap. An expert correspondent for the publication emphasized the challenges involved in reconciling accrual-based accounts with cash accounts, particularly when interpreting cash flow statements in their indirect form.
Investor @SawyerMerritt used X on March 25 to share key excerpts from the Financial Times’ revised article, which discussed the calculation error. In a response on March 26, Elon Musk retweeted Merritt’s post, stating:
“Turns out @FT can’t do finance”
Since its posting, Musk’s tweet has garnered over 8 million views, sparking widespread engagement across social media.
Examination of the Financial Times’ Claims and Subsequent Corrections
The initial report from the Financial Times detailed that Tesla had spent $6.3 billion during the second half of 2024 on equipment and property, which excluded net sales and financial leases according to cash flow statements. During this timeframe, Tesla’s plant, equipment, and property valuations reportedly soared to $5.1 billion, reflecting a notable increase of $4.9 billion.
The Financial Times also noted that this gap in Tesla’s finances was “unusual by its own standards,”a claim that instigated considerable scrutiny from various media outlets and the public.
Upon revising the report, the Financial Times posited that the variances in asset payment processes and the depreciation of property might help clarify the initially reported financial discrepancy. They stressed the importance of trusting auditors’ assessments in these complex matters.
“As we sound the Alphaville bugle while lowering this particular red flag, one unavoidable conclusion is that at a certain point it’s necessary to trust the auditor’s judgment.”
Furthermore, the newspaper indicated that the relationship between Tesla’s financial figures and its balance sheet was not immediately evident, a sentiment echoed in analyses of other large publicly listed corporations.
The Financial Times highlighted a reduction in total accrued liabilities and other expenses, bringing the total to $23.5 billion, which suggested a minor overall cash outflow. Additionally, Tesla’s long-term liabilities, which include warranty and lease commitments, surged by $2 billion.
To further explain the situation, an expert correspondent stated that accurately categorizing cash flows in the context of operational, investment, or financing activities requires comprehensive internal documentation or insider insights.
The Financial Times expressed openness to updating their report in case Tesla provided additional context or information following their revised statement. Ultimately, the publication concluded that the remaining financial ‘crack’ was under half a billion dollars, a significant reduction from their earlier claim of $1.4 billion.
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