Tesla Motors 2012 Q4 Report Shenanigans
These days, I await Tesla Motor's quarterly reports with grim anticipation. I am always guaranteed some unexpected bit of creative accounting, used to paint a brighter picture than reality would normally provide.
Q4 was no different, offering a rosy picture of 2750 vehicles rolling off the production line, with a Q1 2013 profit just around the corner. The revenue from automobile sales and cost of revenue were balanced, showing a sliver of a profit before R&D and administrative costs.
Proof of concept? I'm no so sure.
From 2750 cars, which were primarily Type S sedans, they claim $294,377,000 in income. That's about $110,000 per car, while the MSRP of the sedan is between $50k-$90k. Assuming the average person pays $75k for a Type S, thats only $206 million in revenue. I'm not sure how this worked out, but I'll have to believe it for now.
Their income statement didn't look so bad until I saw the balance sheet.
Accounts payable is up $153 million in one quarter, now sitting at $343 million compared to $306 million in revenues. Their $306 million in revenue required they incur $430 million in expenses, so I would hardly call that a profit.
Furthermore, they have $452 million in long term debt, but were somehow able to pay only $85,000 in interest that quarter. That works out to a 0.07 percent annual interest rate. What is going on here?
Between questionable income and questionable expenses, what is left to be credible? As I've maintained since examining their financial statements, Tesla Motors is headed for a heap of trouble.