Stock Analysis on Net
Stock Analysis on Net

Tesla Inc. (NASDAQ:TSLA)

Analysis of Income Taxes

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Income Tax Expense (Benefit)

Tesla Inc., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Federal —  —  (1) (10) — 
State
Foreign 248  86  24  43  54 
Current 252  91  26  35  55 
Federal —  (4) —  —  — 
State —  —  —  —  — 
Foreign 40  23  32  (4) (28)
Deferred 40  19  32  (4) (28)
Provision for income taxes 292  110  58  32  27 

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Tesla Inc.’s current increased from 2018 to 2019 and from 2019 to 2020.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Tesla Inc.’s deferred decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Tesla Inc.’s provision for income taxes increased from 2018 to 2019 and from 2019 to 2020.

Effective Income Tax Rate (EITR)

Tesla Inc., effective income tax rate (EITR) reconciliation

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Statutory federal tax rate 21.00% 21.00% 21.00% 35.00% 35.00%
Effective tax rate, before effect of U.S. tax law change 25.30% -16.54% -5.76% 31.29% -3.58%
Effective tax rate 25.30% -16.54% -5.76% -1.43% -3.58%

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

Item Description The company
Effective tax rate, before effect of U.S. tax law change Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Tesla Inc.’s effective tax rate, before effect of U.S. tax law change decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Components of Deferred Tax Assets and Liabilities

Tesla Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net operating loss carry-forwards 2,172  1,846  1,760  1,576  649 
Research and development credits 624  486  377  307  208 
Other tax credits 168  126  128  118  107 
Deferred revenue 450  301  156  201  268 
Inventory and warranty reserves 315  243  165  75  96 
Stock-based compensation 98  102  102  97  121 
Operating lease right-of-use liabilities 335  290  —  —  — 
Deferred GILTI tax assets 581  —  —  —  — 
Financial instruments —  —  —  — 
Investment in certain financing funds —  —  —  24  238 
Accruals and others 205  16  28  23  68 
Deferred tax assets 4,948  3,410  2,716  2,424  1,754 
Valuation allowance (2,930) (1,956) (1,806) (1,844) (1,023)
Deferred tax assets, net of valuation allowance 2,018  1,454  910  580  731 
Depreciation and amortization (1,488) (1,185) (861) (538) (680)
Investment in certain financing funds (198) (17) (33) —  — 
Operating lease right-of-use assets (305) (263) —  —  — 
Deferred revenue (50) —  —  —  — 
Other (61) (24) (24) (19) (4)
Financial instruments —  —  —  —  (22)
Deferred tax liabilities (2,102) (1,489) (918) (556) (706)
Deferred tax assets, net of valuation allowance and deferred tax liabilities (84) (35) (8) 24  26 

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Tesla Inc.’s deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Tesla Inc.’s deferred tax assets, net of valuation allowance increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax assets, net of valuation allowance and deferred tax liabilities Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Tesla Inc.’s deferred tax assets, net of valuation allowance and deferred tax liabilities decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

Tesla Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Liabilities
Total liabilities (as reported) 28,418  26,199  23,426  23,023  16,750 
Less: Noncurrent deferred tax liabilities, net 151  66  —  —  — 
Total liabilities (adjusted) 28,267  26,133  23,426  23,023  16,750 
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 22,225  6,618  4,923  4,237  4,753 
Less: Net deferred tax assets (liabilities) (84) (35) (8) 24  26 
Stockholders’ equity (adjusted) 22,309  6,653  4,931  4,214  4,727 
Adjustment to Net Income (loss) Attributable To Common Stockholders
Net income (loss) attributable to common stockholders (as reported) 721  (862) (976) (1,961) (675)
Add: Deferred income tax expense (benefit) 40  19  32  (4) (28)
Net income (loss) attributable to common stockholders (adjusted) 761  (843) (944) (1,965) (703)

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).


Tesla Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Tesla Inc., adjusted financial ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 2.29% -3.51% -4.55% -16.68% -9.64%
Adjusted net profit margin 2.41% -3.43% -4.40% -16.71% -10.04%
Financial Leverage
Reported financial leverage 2.35 5.18 6.04 6.76 4.77
Adjusted financial leverage 2.34 5.16 6.03 6.80 4.79
Return on Equity (ROE)
Reported ROE 3.24% -13.03% -19.83% -46.29% -14.20%
Adjusted ROE 3.41% -12.67% -19.14% -46.64% -14.87%
Return on Assets (ROA)
Reported ROA 1.38% -2.51% -3.28% -6.84% -2.98%
Adjusted ROA 1.46% -2.46% -3.17% -6.86% -3.10%

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Tesla Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Tesla Inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Tesla Inc.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Tesla Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

Tesla Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to common stockholders 721  (862) (976) (1,961) (675)
Revenues 31,536  24,578  21,461  11,759  7,000 
Profitability Ratio
Net profit margin1 2.29% -3.51% -4.55% -16.68% -9.64%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to common stockholders 761  (843) (944) (1,965) (703)
Revenues 31,536  24,578  21,461  11,759  7,000 
Profitability Ratio
Adjusted net profit margin2 2.41% -3.43% -4.40% -16.71% -10.04%

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

2020 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to common stockholders ÷ Revenues
= 100 × 721 ÷ 31,536 = 2.29%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to common stockholders ÷ Revenues
= 100 × 761 ÷ 31,536 = 2.41%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Tesla Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 52,148  34,309  29,740  28,655  22,664 
Stockholders’ equity 22,225  6,618  4,923  4,237  4,753 
Solvency Ratio
Financial leverage1 2.35 5.18 6.04 6.76 4.77
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Total assets 52,148  34,309  29,740  28,655  22,664 
Adjusted stockholders’ equity 22,309  6,653  4,931  4,214  4,727 
Solvency Ratio
Adjusted financial leverage2 2.34 5.16 6.03 6.80 4.79

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

2020 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 52,148 ÷ 22,225 = 2.35

2 Adjusted financial leverage = Total assets ÷ Adjusted stockholders’ equity
= 52,148 ÷ 22,309 = 2.34

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Tesla Inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to common stockholders 721  (862) (976) (1,961) (675)
Stockholders’ equity 22,225  6,618  4,923  4,237  4,753 
Profitability Ratio
ROE1 3.24% -13.03% -19.83% -46.29% -14.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to common stockholders 761  (843) (944) (1,965) (703)
Adjusted stockholders’ equity 22,309  6,653  4,931  4,214  4,727 
Profitability Ratio
Adjusted ROE2 3.41% -12.67% -19.14% -46.64% -14.87%

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

2020 Calculations

1 ROE = 100 × Net income (loss) attributable to common stockholders ÷ Stockholders’ equity
= 100 × 721 ÷ 22,225 = 3.24%

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to common stockholders ÷ Adjusted stockholders’ equity
= 100 × 761 ÷ 22,309 = 3.41%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Tesla Inc.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to common stockholders 721  (862) (976) (1,961) (675)
Total assets 52,148  34,309  29,740  28,655  22,664 
Profitability Ratio
ROA1 1.38% -2.51% -3.28% -6.84% -2.98%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to common stockholders 761  (843) (944) (1,965) (703)
Total assets 52,148  34,309  29,740  28,655  22,664 
Profitability Ratio
Adjusted ROA2 1.46% -2.46% -3.17% -6.86% -3.10%

Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).

2020 Calculations

1 ROA = 100 × Net income (loss) attributable to common stockholders ÷ Total assets
= 100 × 721 ÷ 52,148 = 1.38%

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to common stockholders ÷ Total assets
= 100 × 761 ÷ 52,148 = 1.46%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Tesla Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.