Tesla Inc. (NASDAQ:TSLA)

Reported net income attributable to common stockholders demonstrated substantial growth from 2021 to 2023, followed by a significant decline in 2024 and 2025. The adjusted net income attributable to common stockholders exhibits a similar pattern, closely mirroring the reported net income throughout the observed period.

Overall Trend

From 2021 to 2023, both reported and adjusted net income increased considerably. Reported net income rose from US$5,519 million to US$14,997 million, representing a growth of approximately 171.4%. Adjusted net income followed a similar trajectory, increasing from US$5,518 million to US$15,013 million, a growth of approximately 172.1%. However, a marked reversal occurred in 2024, with reported net income decreasing to US$7,091 million and adjusted net income falling to US$7,103 million. This downward trend continued into 2025, with reported net income reaching US$3,794 million and adjusted net income at US$3,787 million.

Difference Between Reported and Adjusted Net Income

The difference between reported and adjusted net income remains consistently small across all reported years. In 2021, the difference was US$1 million, in 2022 it was US$23 million, in 2023 it was US$16 million, in 2024 it was US$12 million, and in 2025 it was US$7 million. This suggests that adjustments to net income are relatively minor and do not materially alter the overall profitability picture.

The substantial decline in both reported and adjusted net income from 2023 to 2025 warrants further investigation. While the adjustments themselves are small, the overall reduction in profitability is significant and could be indicative of changing market conditions, increased costs, or other operational factors. The consistency between the reported and adjusted figures suggests the decline is not driven by accounting adjustments, but rather by underlying business performance.

The profitability ratios demonstrate a period of initial expansion followed by a significant contraction. Reported and adjusted profitability metrics move in parallel, suggesting that adjustments are not materially impacting the observed trends. A strong performance is evident in the earlier periods, which subsequently declines over the observed timeframe.

Net Profit Margin

The reported net profit margin increased from 10.25% in 2021 to 15.41% in 2022, remaining relatively stable at 15.50% in 2023. A substantial decrease is then observed, falling to 7.26% in 2024 and further to 4.00% in 2025. The adjusted net profit margin mirrors this pattern precisely.

Return on Equity (ROE)

Reported ROE follows a similar trajectory to the net profit margin. It rises from 18.28% in 2021 to a peak of 28.09% in 2022, then declines to 23.94% in 2023. A marked reduction occurs in 2024, dropping to 9.73%, and continues to fall to 4.62% in 2025. Adjusted ROE exhibits the same trend.

Return on Assets (ROA)

Reported ROA increases from 8.88% in 2021 to 15.25% in 2022, and then to 14.07% in 2023. Similar to the other ratios, a significant decline is observed in 2024 (5.81%) and 2025 (2.75%). Adjusted ROA demonstrates an identical pattern.

The consistency between reported and adjusted values across all three ratios suggests that the observed changes in profitability are not being significantly altered by the adjustments made. The pronounced decline in all profitability metrics from 2023 to 2025 warrants further investigation to determine the underlying causes, such as increased costs, decreased revenue, or changes in asset utilization.

The financial performance, as reflected by net profit margins, demonstrates a period of substantial growth followed by a marked decline. Both reported and adjusted net income attributable to common stockholders initially increased significantly before experiencing a downturn in later periods. This pattern is mirrored in the corresponding net profit margins.

Reported Net Profit Margin

The reported net profit margin exhibited an upward trend from 10.25% in 2021 to a peak of 15.50% in 2023. However, a significant decrease is observed in subsequent years, falling to 7.26% in 2024 and further declining to 4.00% in 2025. This indicates a weakening ability to translate revenue into profit as reported.

Adjusted Net Profit Margin

The adjusted net profit margin closely follows the trend of the reported margin. It rose from 10.25% in 2021 to 15.51% in 2023, before decreasing to 7.27% in 2024 and 3.99% in 2025. The consistency between reported and adjusted figures suggests that adjustments are not materially impacting the overall profitability trend.

The difference between reported and adjusted net income attributable to common stockholders is consistently minimal across all periods, suggesting that the adjustments made are not substantial. The substantial decline in both reported and adjusted net profit margins from 2023 to 2025 warrants further investigation to determine the underlying causes, such as increased costs, decreased revenue, or changes in the company’s operational efficiency.

Overall Trend

A clear pattern emerges: a period of robust profitability growth culminating in 2023, followed by a rapid deterioration in profitability in the subsequent two years. This shift suggests a potential change in the company’s competitive landscape, cost structure, or revenue generation capabilities.

The period between 2021 and 2025 demonstrates significant fluctuations in reported and adjusted net income attributable to common stockholders, which directly impacts return on equity (ROE) metrics. Initially, both reported and adjusted net income experienced substantial growth, followed by a marked decline in later years.

Net Income Trends

Reported net income attributable to common stockholders increased from US$5,519 million in 2021 to US$12,556 million in 2022, representing a considerable year-over-year increase. This growth continued, albeit at a slower pace, reaching US$14,997 million in 2023. However, a substantial decrease is observed in 2024, with reported net income falling to US$7,091 million, and further declining to US$3,794 million in 2025.

Adjusted net income mirrors this trend closely, with values of US$5,518 million, US$12,533 million, US$15,013 million, US$7,103 million, and US$3,787 million for the years 2021 through 2025, respectively. The difference between reported and adjusted net income remains consistently minimal throughout the period.

Reported ROE Analysis

Reported ROE follows the trajectory of net income. It rose from 18.28% in 2021 to a peak of 28.09% in 2022, then decreased to 23.94% in 2023. A significant decline is then evident, with ROE falling to 9.73% in 2024 and further to 4.62% in 2025. This indicates a diminishing return on shareholder equity as net income decreased.

Adjusted ROE Analysis

Adjusted ROE exhibits a pattern nearly identical to that of reported ROE. Values are 18.28%, 28.04%, 23.97%, 9.74%, and 4.61% for the years 2021 through 2025, respectively. The consistency between reported and adjusted ROE suggests that adjustments to net income do not materially alter the overall assessment of equity returns.

The observed trend indicates a period of strong profitability followed by a substantial reduction in returns. The decline in both net income and ROE from 2023 to 2025 warrants further investigation to determine the underlying causes, such as changes in operational efficiency, increased costs, or shifts in market conditions.

The period under review demonstrates significant fluctuations in profitability metrics, as reflected in both reported and adjusted return on assets. Initial growth is followed by a marked decline. Reported and adjusted net income attributable to common stockholders generally follow a similar pattern, suggesting adjustments do not materially alter the overall profitability picture.

Reported Return on Assets (ROA)

Reported ROA increased substantially from 8.88% in 2021 to a peak of 15.25% in 2022. This growth slowed in 2023, with a reported ROA of 14.07%. A significant decrease is then observed in 2024, falling to 5.81%, and continuing downward to 2.75% in 2025. This indicates a weakening ability to generate profit from its asset base over the latter part of the period.

Adjusted Return on Assets (ROA)

The adjusted ROA mirrors the trend of the reported ROA closely. It rose from 8.88% in 2021 to 15.22% in 2022, reached 14.08% in 2023, and then declined to 5.82% in 2024 and 2.75% in 2025. The consistency between reported and adjusted ROA suggests that the adjustments made to net income do not significantly impact the overall assessment of asset utilization efficiency.

Net Income Trend

Reported net income attributable to common stockholders increased from US$5,519 million in 2021 to US$12,556 million in 2022, and further to US$14,997 million in 2023. However, a substantial decrease is evident in 2024, with net income falling to US$7,091 million, and continuing to decline to US$3,794 million in 2025. Adjusted net income follows a similar trajectory, reinforcing the observed trend in profitability.

Overall Observations

The company experienced a period of strong growth in profitability through 2023, as indicated by increasing ROA and net income. However, a pronounced downturn began in 2024 and continued into 2025, with both ROA and net income declining significantly. This suggests potential challenges in maintaining profitability and efficiently utilizing assets in the more recent years of the period.