Unpacking Tesla’s CAPEX accounting: Reflecting on FT's "mea culpa"
The FT does get full credit for asking great questions. We ask a few more about CAPEX and the gap in US GAAP.
On March 25, 2025, the FT published a “mea culpa” piece by Dan McCrum, retracting the original FT article that discussed Tesla’s gap between cash CAPEX-related spending and changes in PPE on the balance sheet.
According to FT, the mismatch between the cash spent and the balance sheet may stem from timing differences between purchases and payments of the PPE and disposals of the depreciated equipment:
Two things help to reconcile the numbers: payments for assets already purchased, and the possible disposal of depreciated property.
Francine and I discussed these explanations in our Tesla piece as the types of events and disclosures that would help explain the gap:
Conceptually, we are looking for the following patterns:
Non-cash transactions that decrease PPE balances and do not affect the cash flow, such as impairments;
Disposals that may involve cash changing …