Yes, Tesla Did Indeed Profit $26.3 in Q2…Here’s Why It Wasn’t A $30.5 Million Net Loss


The question of whether Tesla Motors posted a profit or a loss in Q2 of 2013 has been answered differently depending on the source.

Elon Musk Gets Paid for Advance Model X Work

Elon Musk Gets Paid for Advance Model X Work

Some say profit.  Others claim loss.

While we won’t dive deeply into the specifics (for that, refer to this post and the associated Q2 link), we’re on the side of the fence that says profit and here’s why: Tesla Motors dished out $19.3 million in stock-based compensation to several of its employees, most notably $4.3 million went to Tesla CEO Elon Musk.

In a way, Tesla paid it forward, meaning that most of the stock-based compensation was based on future developmental work on the Model X and Gen III.  For example, Tesla’s board of directors determined that Musk deserved $4.3 million for work he will do on the Model X at a later date.

This doesn’t make up the entire discrepancy between the adjusted $26. million profit and the $30.5 million net loss, but you can see from this that these one-time payouts make a substantial difference.  Tesla had other one-timers, too.

Are Tesla’s action here legal?  Sure, says Kevin Tynan, a Bloomberg Industries auto analyst.  As Tynan states:

“[Tesla] is acting a lot more like a technology company than an automaker at this point.”

This statement is in reference to Tesla paying forward for work that has not yet been done.  To which Tynan says:

“I wouldn’t think that is all that uncommon, especially if you’re on target.”

So, are we to assume the Model X is on target?  Tynan thinks so and we have no reason to doubt.

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9 Comments on "Yes, Tesla Did Indeed Profit $26.3 in Q2…Here’s Why It Wasn’t A $30.5 Million Net Loss"

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Generally Acceptable Accounting Principles. If they reported a loss to the SEC, which they did, then …


Talk about window dressing. Use stock to pay for work that hasn’t been performed so you can report you earned a profit instead of reporting what actually happened, a loss.

I think Tesla just invented a perpetual motion machine for financial reporting.

To report a loss, instead of a taxable gain.

Disregard, still learning to read.

They are selling stock to the employees and the money they get from that is counted as profit.
It would be the same as counting the billion dollars they got from issuing new stock.

Tesla has yet to make any kind of profit on their core business. Without the ZEV credits and eternal investor cash infusions TSLA would have been bankrupt several times now.

The irony is that the hype is so strong and Elon’s drive so recklessly fearless that they just might survive on the illusions anyway : )

As opposed to GM surviving on ownership / graft from multiple governments around the world?

They appear to show the DoE loan repayment fee as part of non-GAAP”profit” that is an abnormal expense. The thing this did was kick the debt can down the road. It would have been fiscally cheaper to keep the doe loan another year or two and pay then. Now, the debt is more expensive and relies on Sr. Notes and dillution. a gimmick. That puts those notes ahead of common shareholders if there ever is a bankruptcy. Shareholders just got a wall put in front of them, yet they keep buying. Correct me if I’m wrong. They also convert at $184 pps and that dilutes further. The stock is more interesting to watch than their car production. Stock holders are making far more money than the company is in terms of profits. This doesn’t end well for mom and pop investor.

A real strange world where one can own 4 million $ for having fun doing a great job while others can’t even dream of owning that much on a ten lifetimes of an straining tiring work. Effort and $, two very different things. But as one would say, everyone is free to choose its way, or is he? Makes me remember the movie “Time is up”, where money takes an extra meaning since it is counted in life seconds.

The ideas and the path taken are what separate the greats from the ordinary. Business books are written about this stuff all the time. For example, there are several recently about another Steve Jobs. Are all the ideas from Elon? No, nor is all the leadership. However, he has managed to pull together a team of experts (in their respective fields) and created a common goal. Rehashed ideas abound in the Tesla Model S: skateboard platform, very aerodynamic form, using social media instead of traditional to build a base of fans that feel like insiders, the list goes on.

Does he deserve $4mil? I don’t know…but based on what he’s done with his previous $$$ from PayPal I’d say his pocket is a great investment! Give it to a guy on Wall Street and his goal will be to make himself a bigger pile. Give it to Elon and I bet at least part of it gets reinvested in this and his other projects.