Analysis of Debt
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Total Debt (Carrying Amount)
Tesla Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The data indicates notable fluctuations in the debt structure over the reported periods. There is a clear downward trend in the total debt and finance leases from 2020 through 2022, followed by a resurgence through 2024.
- Current portion of debt and finance leases
- This component decreased from 2,132 million USD at the end of 2020 to a low of 1,502 million USD in 2022. Subsequently, it rose significantly to 2,373 million USD in 2023 and further to 2,456 million USD in 2024, exceeding the initial 2020 level.
- Debt and finance leases, net of current portion
- This long-term debt element exhibited a sharp decline from 9,556 million USD in 2020 to 1,597 million USD in 2022, representing a substantial reduction. Thereafter, it experienced a recovery, increasing to 2,857 million USD in 2023 and nearly doubling to 5,757 million USD by 2024, which remains below the 2020 peak but indicates a significant rebound.
- Total debt and finance leases (carrying amount)
- The aggregate debt mirrored the trends of its components, contracting from 11,688 million USD in 2020 to 3,099 million USD in 2022. Following this trough, total debt progressively increased to 5,230 million USD in 2023 and 8,213 million USD in 2024. Despite this increase, the total debt at the end of 2024 remains lower than the 2020 level, though the gap has narrowed considerably.
Overall, the data reflects an initial strategy of significant debt reduction through 2022, followed by renewed borrowing or financing activity leading to an increase in both short-term and long-term debt components by 2024. This pattern may indicate a shift toward leveraging debt for operational or strategic purposes after a period of deleveraging.
Total Debt (Fair Value)
| Dec 31, 2024 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Convertible Senior Notes | |
| Other debt | |
| Finance lease liabilities | |
| Total debt and finance leases (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2024-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt and finance leases:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Tesla Inc., interest costs incurred
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense | |||||||||||
| Capitalized interest | |||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Interest Expense
- The interest expense exhibits a notable decline from 748 million US dollars at the end of 2020 to 371 million in 2021, followed by a further decrease to 191 million in 2022. It then slightly reduces again to 156 million in 2023, before experiencing an upward trend, rising to 350 million in 2024. This pattern indicates a significant initial reduction in interest expense over the first three years, with a reversal into growth in the final year.
- Capitalized Interest
- Capitalized interest remains relatively stable between 2020 and 2021, increasing marginally from 48 million to 53 million US dollars. However, data for 2022 through 2024 is not available, making it difficult to assess any longer-term trends or changes beyond 2021.
- Interest Costs Incurred
- The total interest costs incurred follow a similar trajectory to the interest expense, as the values correspond closely. Starting at 796 million US dollars in 2020, the figure drops substantially to 424 million in 2021 and continues down to 191 million by 2022. It declines marginally to 156 million in 2023 before increasing to 350 million in 2024. The initial decline suggests effective management or refinancing strategies to reduce interest burden, while the increase in 2024 may indicate higher borrowing costs or increased debt levels.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
The interest coverage ratios over the five-year span indicate significant variations, reflecting changing earnings relative to interest expenses.
- Interest Coverage Ratio (without capitalized interest)
- Initially, the ratio was relatively low at 2.54 in 2020, suggesting modest earnings available to cover interest obligations. A substantial increase occurred in 2021, rising sharply to 18.1, signaling a marked improvement in earnings or a reduction in interest expenses relative to earnings. This upward trend continued dramatically into 2022, reaching a peak of 72.83, a level indicating an exceptionally strong ability to cover interest costs. However, in the subsequent years, there was a decline to 64.93 in 2023 and a further reduction to 26.69 in 2024, although still reflecting a comfortable coverage position compared to the initial period.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- This metric closely mirrors the trend of the unadjusted ratio, beginning at 2.39 in 2020 and increasing sharply to 15.83 in 2021. It then matches the unadjusted ratio at 72.83 in 2022, followed by declines to 64.93 in 2023 and 26.69 in 2024. The similarity between adjusted and unadjusted ratios suggests that capitalized interest had limited impact on the overall interest coverage trends through the period analyzed.
Overall, the data reveals a significant improvement in the company's earnings relative to interest expenses starting from 2020 to a peak in 2022, followed by a reduction in subsequent years. Despite these declines, the interest coverage ratios remain well above the levels seen at the beginning of the period, indicating sustained financial strength in meeting interest obligations.