Tesla Inc. (NASDAQ:TSLA)

Net Fixed Asset Turnover

The net fixed asset turnover ratio, starting from March 31, 2020, exhibits a rising trend through 2021 and into early 2023, increasing from around 2.47 to a peak near 3.56. Following this peak, there is a noticeable gradual decline through 2024 and into mid-2025, reaching approximately 2.4. This pattern suggests an initial period of improving efficiency in utilizing fixed assets to generate revenue, followed by a reduction in asset turnover effectiveness in the later periods measured.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

When including operating lease and right-of-use assets, the turnover ratio follows a similar trajectory as the net fixed asset turnover. It begins around 2.20 in early 2020, gradually increasing to just over 3.16 in early 2023. Thereafter, it declines steadily, approaching about 2.10 by mid-2025. This indicates that asset utilization efficiency when considering leased assets also improved considerably before facing a diminishing trend in the latest periods.

Total Asset Turnover

Total asset turnover starts at 0.60 in early 2020 and sees consistent growth through 2021 and into early 2023, peaking around 1.04. The ratio then decreases gradually to about 0.72 by mid-2025. This pattern reflects a consistent improvement in overall asset utilization within the company, followed by a moderate decline as the latest quarters progress.

Equity Turnover

Equity turnover rises steadily from 1.42 in early 2020 to about 1.88 by the end of 2021. This is followed by a period of relative stabilization with minor fluctuations around the 1.8 to 1.6 range during 2022 and early 2023, but thereafter it declines steadily over the subsequent quarters, ultimately falling to roughly 1.20 by mid-2025. This suggests that the ability to generate sales from shareholders’ equity improved initially but weakened considerably in the later periods under review.

The analysis of the quarterly financial data reveals a pattern of growth and subsequent moderation in key financial indicators over the covered periods.

Revenues (US$ in millions)

Revenues exhibited a consistent upward trend from March 2020 to December 2021, increasing from 5,985 million USD to a peak of 17,719 million USD. Following this peak, there was further growth in the first quarter of 2022, reaching 18,756 million USD. However, afterward, the revenues showed volatility, with periods of both increase and decline. From March 2022 through June 2025, revenues fluctuated between approximately 16,934 million USD and 25,707 million USD, with the latest data point for June 2025 showing a decrease to 22,496 million USD. This indicates seasonal or market-driven variations affecting sales volumes or pricing.

Property, Plant and Equipment, Net (US$ in millions)

The net value of property, plant, and equipment displayed a steady increase over the entire period analyzed, growing from 10,638 million USD in March 2020 to 38,574 million USD in June 2025. This reflects ongoing capital investment and asset accumulation, likely aligned with production capacity expansion or technology upgrades. The continuous growth suggests a strategic focus on long-term asset enhancement despite fluctuations in revenues.

Net Fixed Asset Turnover (ratio)

Net fixed asset turnover ratios begin from an available data point in September 2020 at 2.47 and increase steadily to a peak of approximately 3.56 in December 2022, indicating improving efficiency in the use of fixed assets to generate revenues. Post this peak, the ratio demonstrates a declining trend, reaching approximately 2.4 by June 2025. The decrease suggests either a reduction in operational efficiency relative to the asset base or a lag in revenue growth relative to capital expenditures during the latter periods.

The financial data over the analyzed quarters reveals several notable trends in the company's operational performance and asset utilization.

Revenues

Revenues exhibit a generally upward trend from March 2020 through December 2021, rising from approximately $5,985 million to a peak of around $17,719 million. This growth reflects strong expansion during this period. Following this peak, revenue figures demonstrate some volatility but generally maintain high levels through 2022 and 2023, fluctuating between roughly $16,900 million and $25,100 million. However, from the first quarter of 2025, a marked decline is observed, with revenues decreasing to about $19,335 million and $22,496 million in the subsequent quarter, indicating potential challenges or market shifts impacting sales.

Property, Plant, and Equipment, Net (including operating lease, right-of-use asset)

The net value of property, plant, and equipment shows a consistent and steady increase across all reported periods. Starting from about $11,835 million in March 2020, this asset base grows progressively to reach approximately $44,207 million by June 2025. This continuous investment in physical and leased assets suggests ongoing capital expenditure and capacity expansion over the evaluated timeframe.

Net Fixed Asset Turnover (including operating lease, right-of-use asset)

The net fixed asset turnover ratio, which measures revenue generated per unit of fixed assets, shows an initial increasing trend from 2.2 in the third quarter of 2020 to a peak of about 3.16 in the third quarter of 2023. This rise indicates improved efficiency in using fixed assets to generate sales during this timeframe. Post-peak, the ratio steadily declines, falling to approximately 2.1 by the second quarter of 2025. This downward trend may reflect either rising asset levels outpacing revenue growth or reduced sales efficiency in later periods.

In summary, the company’s revenues increased substantially between 2020 and early 2022, supported by consistent asset growth and improving asset turnover efficiency. However, in the most recent quarters observed, revenue declines alongside decreasing asset turnover ratios suggest emerging inefficiencies or market pressures that may require attention. The ongoing expansion of property, plant, and equipment indicates continued capital commitment, yet the declining turnover ratio could imply that recent asset additions are not yet fully contributing to revenue generation at previous levels.

Revenues

The revenue figures demonstrate a generally upward trend over the reported periods with fluctuations. Starting at approximately $5,985 million in March 2020, revenues increased steadily, peaking multiple times around late 2021 and early 2022 with values exceeding $24,000 million. Afterward, the revenues show variability but largely maintain levels above $20,000 million, with occasional declines, such as in March 2025 and June 2025, where values drop to $19,335 million and $22,496 million respectively. This indicates ongoing growth with periodic fluctuations likely influenced by external market or operational factors.

Total Assets

Total assets show a consistent and significant increase throughout the entire period, moving from $37,250 million in March 2020 to an estimated $128,567 million by June 2025. The increase is steady without any declines, indicating ongoing asset accumulation, likely through investments, acquisitions, or retained earnings driving balance sheet expansion over time.

Total Asset Turnover Ratio

This ratio, which measures revenue generated per dollar of assets, exhibits an improving trend through 2020 and 2021, reaching above 1.0 on a few occasions, which implies effective utilization of assets to generate revenues during that period. Starting around 2022, the ratio begins a gradual decline from near 1.01 down to 0.72 by June 2025. This downward trend suggests that asset growth is outpacing revenue growth, indicating decreasing efficiency in asset utilization or potentially changes in asset composition affecting turnover.

Overall Analysis

The company exhibits robust revenue and asset growth over the multi-year period. While revenues generally increase with some volatility, total assets rise steadily and substantially, leading to a declining asset turnover ratio in recent years. This divergence suggests that although the company is expanding its asset base significantly, the efficiency with which these assets are converted into revenues is diminishing. This could indicate strategic shifts such as heavier capital investments, changes in business operations, or challenges in maintaining pace in sales growth relative to asset accumulation. Continuous monitoring of asset utilization will be critical to assess long-term profitability and operational efficiency.

An analysis of the quarterly financial data reveals several notable trends in the company's financial performance over the examined periods.

Revenues

The revenues exhibit overall growth with some fluctuations. From the end of the first quarter of 2020 through the end of 2021, revenues generally increased, moving from 5,985 million US dollars to a peak of 17,719 million US dollars by December 2021. A slight volatility appeared in 2022, with revenues decreasing in mid-2022 but rising again toward the end of the year and peaking at 25,167 million US dollars in the last quarter of 2023. However, in subsequent quarters leading to mid-2025, there is a noticeable decline and variability, with revenues falling to 19,335 million US dollars by the first quarter of 2025 before recovering partially to 22,496 million US dollars in the following quarter.

Stockholders' Equity

Stockholders’ equity shows a clear upward trend throughout the analyzed timeframe. Starting at 9,173 million US dollars in the first quarter of 2020, it consistently increased each quarter, reaching 77,314 million US dollars by mid-2025. This steady rise suggests ongoing retention of earnings or additional equity financing, reflecting growing company value and likely increasing investor confidence.

Equity Turnover Ratio

The equity turnover ratio, which is a measure of how effectively the company is using its equity to generate revenues, presents an interesting pattern. It rose from 1.42 in September 2020 up to a peak of 1.88 by December 2021, indicating improving efficiency in the use of equity to drive revenue. Following this peak, there is a gradual decline in the ratio to 1.2 by June 2025. The decline suggests a relative decrease in revenue generation efficiency compared to equity base growth in the later periods.

In summary, the company demonstrated robust revenue growth through 2021 with some volatility and decline in recent quarters. Concurrently, the stockholders' equity expanded significantly over the entire timeframe. The peak in equity turnover ratio in late 2021, followed by a steady decrease, implies that while equity has grown substantially, the relative ability to convert that equity into revenue has lessened in recent periods. This may reflect operational challenges, market conditions, or strategic shifts impacting revenue generation relative to equity size.