Financial Times admits it's 'Tesla is missing $1.4 billion' report is completely wrong

The Financial Times has admitted it made a lapse in judgment when it posted the article "$1.4bn is a lot to fall through the cracks, even for Tesla," which highlighted a purported gap between the company's capital investment and asset values.

The author of the article, Dan McCrum, has posted a follow-up article titled "Filling in that Tesla 'crack'" where the first line of that article is "Mea culpa," which is a Latin phrase that translates to "my fault" or "through my fault." McCrum goes on to explain the purported discrepancy that he reported "may have a benign explanation," which seems to be gathered from an expert who got in touch with FT to explain how to look at Tesla's books correctly.

McCrum attempted to highlight the discrepancy between Tesla's $6.3 billion capital investment in the second half of last year and the smaller $4.9 billion rise in the value of gross assets the company reported, claiming Tesla seemingly lost the difference somewhere in the books. That simply isn't the case, or at least according to McCrum, who has now been informed about two explanations that can reconcile the figures: "payments for assets already purchased, and the possible disposal of depreciated property."

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According to the new report, Tesla paid down $689 million in liabilities it purchased on credit for its property, plant, and equipment from January 1 to December 31, 2024.

The targeted six months highlighted by McCrum in the previous article included this payment of $689 million, bringing Tesla's total discrepancy down to $733 million. Additionally, asset disposals reduce the gap by a further $270 million, bringing it down to $463 million, which is a small enough figure, by McCrum's own admission, to be "filled with some combination of foreign exchange movements, non-material asset write-offs, or the sale of machinery or equipment close to its not-fully depreciated value."

Next, according to the "new accountant friends," the other explanation is within the allocation of flows to operations, investing, or financing parts of the cash flow statement. Unfortunately, it would require insider knowledge or documentation to fully reconcile this.

So, it appears the Financial Times published a damning story without fully understanding how to read the accounting books of Tesla while simultaneously admitting it needed help to understand the balance sheet fully. Yes, that's right. The Financial Times didn't fully understand how to read finances and published the story anyway.

In other Elon Musk-related news, the Tesla CEO fired off some comments at Twitch streamer and political commenter Hasan Piker about taking a sponsorship deal from Ubisoft for its recently released Assassin's Creed Shadows. Musk called the game "terrible," and Ubisoft fired back with a response.

• Read more: Elon Musk calls Assassin's Creed Shadows 'terrible,' Ubisoft responds with slam dunk