TSLA, Tesla, Inc.
We are focused on bringing artificial intelligence into the real world, through products and services like Full Self-Driving and Robotaxi, as well as working to develop and commercialize AI robots.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is Automotive (87%) and Energy generation and storage (13%).
- Situation
- Cyclical. margins collapse repeatedly across the cycle, a single year misleads; look at normalized, through-cycle earnings and the balance sheet at the trough.
- What moves the needle
- How hard the assets work, and what the inputs cost. What decides it: utilization, how much of the capex merely keeps the assets running, and what a downturn does to a heavy fixed-cost base.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 4%, above 15% in 3 of 10 years). Owner earnings agree: roughly 4% of revenue reaches owners as cash, though it swings. The cycle and the balance sheet decide this one, so weigh the worst year against the median, and read the 10-K.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Automotive is 87% of revenue, so this is largely a single-segment business.
- Automotive87%$82.1B
- Energy generation and storage13%$12.8B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $7.0B | $11.8B | $21.5B | $24.6B | $31.5B | $53.8B | $81.5B | $96.8B | $97.7B | $94.8B | $97.9B |
| Operating marginOp. mgn | −9.5% | −13.9% | −1.8% | −0.3% | 6.3% | 12.1% | 16.8% | 9.2% | 7.2% | 4.6% | 5.0% |
| Net incomeNet inc. | ($675M) | ($2.0B) | ($976M) | ($862M) | $721M | $5.5B | $12.6B | $15.0B | $7.1B | $3.8B | $3.9B |
| EPS (diluted)EPS | $-0.25 | $-0.63 | $-0.31 | $-0.27 | $0.22 | $1.63 | $3.61 | $4.30 | $2.03 | $1.08 | $1.09 |
| Owner earningsOwner earn. | ($1.4B) | ($3.5B) | ($3M) | $1.1B | $2.8B | $5.0B | $7.6B | $4.4B | $3.6B | $6.2B | $7.0B |
| ROICROIC | -6% | -12% | -3% | -0% | 11% | 32% | 41% | 17% | 9% | 4% | 5% |
| CapexCapex | $1.3B | $3.4B | $2.1B | $1.3B | $3.2B | $6.5B | $7.2B | $8.9B | $11.3B | $8.5B | $9.5B |
| Capex / revenueCapex/rev | 18.3% | 29.0% | 9.8% | 5.4% | 10.0% | 12.0% | 8.8% | 9.2% | 11.6% | 9.0% | 9.7% |
| Capex vs depreciationCapex/dep | 2.68× | 4.44× | — | — | — | — | — | — | — | — | 9.23× |
| Total debtDebt | $7.0B | $9.6B | $10.6B | $11.8B | $10.2B | $5.3B | $2.0B | $4.7B | $7.9B | $8.2B | $9.4B |
| Cash & investmentsCash+inv | $3.4B | $3.4B | $3.7B | $6.3B | $19.4B | $17.7B | $22.2B | $29.1B | $36.6B | $44.1B | $44.7B |
| Net debt / (cash)Net debt | $3.6B | $6.3B | $6.9B | $5.5B | ($9.2B) | ($12.4B) | ($20.1B) | ($24.4B) | ($28.7B) | ($35.9B) | ($35.3B) |
Owner’s Scorecard
Will it survive?
- Can it pay its interest? 12.9×ComfortableOperating income $4.4B ÷ interest expense $338M
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- ModerateTotal debt $9.4B ÷ operating income $4.4B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash +$34.7BNet cashCash $16.5B + ST investments $27.5B − debt $9.4B
Cash and short-term investments exceed every dollar of debt by $34.7B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- TightDSO 18 + DIO 58 − DPO 63 days
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below averageNOPAT $3.2B ÷ invested capital $75.0B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- SolidOwner Earnings $6.2B = operating cash $14.7B − capex $8.5B
What an owner could take out without starving the business. That's 7% of revenue. Treating stock comp as the real expense it is (less $2.8B of SBC) leaves $3.4B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $14.7B ÷ net income $3.8B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
The filing data didn't include the inputs for this check.
- Investing or harvesting? 11.08×ExpandingCapex $8.5B ÷ depreciation $769M
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 6 of 10
Lost money in 4 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 3 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin −10% (FY2016) → 5% (FY2025)
Margins widened over the record, pricing power intact or improving.
- Reinvestment, incremental ROIC 12%
Reinvested capital earned only a modest return, growth is getting expensive.
- Worst year 2017 · −13.9% op. margin
Operations went underwater in 2017, understand why before trusting the good years.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $79.4B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$53.7B · 68%
- Retained (debt / cash)$25.7B · 32%
It reinvested $53.7B (68%) back into the business and returned $0 (0%) to owners, $0 in dividends, $0 in buybacks. Total debt rose $2.4B across the span.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- Stock-based compensation$2.8B
The slice of the business handed to employees in shares this year, 3% of revenue, equal to 65% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
3 of 5 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $94.8B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 2.16×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $9.4B vs $36.9B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (10-yr record) · 4 loss years
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth —Earnings +33% over the record · —
Earnings were negative early in the record, a growth rate isn't meaningful.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $1.08/share and book value $23.28/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Tesla, Inc. has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $7.0B on 3538M diluted shares; net cash $35.3B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationBusiness
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“Pursuant to the IRA, as modified by the OBBBA, under Sections 48, 48E and 25D of the Internal Revenue Code ("IRC"), standalone energy storage technology is eligible for a tax credit between 6% and 50% of qualified expenditures, regardless of the source of energy, which may be claimed by our customer…”
From the recordRevenue exposed (TTM)$97.9B - Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“We also purchase many components for our energy generation systems from various third-party manufacturers to provide for competitive pricing and adequate supply.”
From the recordOperating margin5.0% now (TTM), off a 16.8% peak (FY2022) - Supplier & input dependenceBusiness
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“As is the case for some OEM companies, some of our procured components and systems are sourced from single suppliers.”
From the recordGross-margin cushion (TTM)19% - Concentrated dependenceRisk Factors
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Likewise, as we develop and grow our energy products and services worldwide, our success will similarly depend on our ability to correctly forecast demand in various markets.”
From the recordOwner-earnings margin at stake (TTM)7% - Debt terms & refinancingRisk Factors
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“Furthermore, our failure to comply with our debt covenants could result in a default under our debt agreements, which could permit the holders to accelerate our obligation to repay the debt.”
From the recordBalance sheet (TTM)+$34.7B net cash · interest covered 12.9× - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“In addition, in the past, following periods of volatility in the overall market or the market price of our shares, securities class action litigation has been filed against us.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandBusiness
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“However, sales of vehicles in the automobile industry tend to be cyclical in many markets, which may expose us to volatility from time to time.”
From the recordWorst year on record−13.9% operating margin (FY2017)
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Our effective tax rate increased from 20% to 27% in the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to changes in the mix of our jurisdictional earnings, a decrease in foreign income deductions resulting from lower taxable income attributable to the OB…”
- “Additionally, the decrease was partially offset by a $277 million decrease in principal payments on finance leases, a $133 million decrease in payments for buy-outs of noncontrolling interests in subsidiaries and $101 million of proceeds received from directors in shareholder settlement net of payme…”
- “We will continue to adjust accordingly to such developments, and we believe our ongoing cost reduction efforts, including through production innovation, process improvements and logistics optimization, and focus on operating leverage, vertical integration and supply chain localization will continue …”
- “Gross margin for total automotive decreased from 18.4% to 17.8% in the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to a decrease in regulatory credits revenue as well as the changes in automotive sales revenue and cost of automotive sales revenue, as di…”
- “As a result, misalignment of consumer demand and the technologies and initiatives associated with the 2025 CEO Performance Award, including the product goals, may impair our ability to realize returns on such investments and could lead to strategic misalignment, underperformance or write-downs of re…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Automakers
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| FFord Motor Co | $187.3B | 7% | -4.9% | -55% | 7% |
| GMGeneral Motors Company | $168.0B | 40% | 1.7% | 2% | 10% |
| TSLATesla, Inc. | $94.8B | 18% | 4.6% | 4% | 7% |
| PCARPaccar Inc | $28.4B | 20% | 10.6% | 15% | 13% |
| LEALear Corp | $23.3B | 6% | 3.3% | 9% | 2% |
| APTVAptiv PLC | $20.4B | 19% | 5.8% | 4% | 7% |
| BWABorgwarner Inc | $14.3B | 19% | 3.7% | 4% | 8% |
| RIVNRivian Automotive, Inc. / DE | $5.4B | 3% | -66.5% | -52% | -46% |