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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Tesla Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	11,309)	14,874)	7,214)	2,291)	901)
Cost of capital²	26.38%	26.50%	26.48%	25.82%	24.47%
Invested capital³	65,244)	49,621)	40,247)	39,217)	25,479)

Economic profit⁴	(5,904)	1,727)	(3,444)	(7,836)	(5,333)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 11,309 – 26.38% × 65,244 = -5,904

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Tesla Inc. economic profit increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Tesla Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss) attributable to common stockholders	14,997)	12,556)	5,519)	721)	(862)
Deferred income tax expense (benefit)¹	(6,349)	(196)	(149)	40)	19)
Increase (decrease) in deferred revenue²	1,564)	1,052)	757)	372)	749)
Increase (decrease) in accrued warranty reserve³	1,647)	1,404)	633)	379)	341)
Increase (decrease) in equity equivalents⁴	(3,138)	2,260)	1,241)	791)	1,109)
Interest expense	156)	191)	371)	748)	685)
Interest expense, operating lease liability⁵	243)	140)	102)	89)	77)
Adjusted interest expense	399)	331)	473)	837)	762)
Tax benefit of interest expense⁶	(84)	(70)	(99)	(176)	(160)
Adjusted interest expense, after taxes⁷	315)	262)	374)	661)	602)
Interest income	(1,066)	(297)	(56)	(30)	(44)
Investment income, before taxes	(1,066)	(297)	(56)	(30)	(44)
Tax expense (benefit) of investment income⁸	224)	62)	12)	6)	9)
Investment income, after taxes⁹	(842)	(235)	(44)	(24)	(35)
Net income (loss) attributable to noncontrolling interest	(23)	31)	125)	141)	87)
Net operating profit after taxes (NOPAT)	11,309)	14,874)	7,214)	2,291)	901)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in deferred revenue.

³ Addition of increase (decrease) in accrued warranty reserve.

⁴ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to common stockholders.

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 4,343 × 5.60% = 243

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 399 × 21.00% = 84

⁷ Addition of after taxes interest expense to net income (loss) attributable to common stockholders.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,066 × 21.00% = 224

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Tesla Inc. NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Tesla Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Provision for (benefit from) income taxes	(5,001)	1,132)	699)	292)	110)
Less: Deferred income tax expense (benefit)	(6,349)	(196)	(149)	40)	19)
Add: Tax savings from interest expense	84)	70)	99)	176)	160)
Less: Tax imposed on investment income	224)	62)	12)	6)	9)
Cash operating taxes	1,208)	1,335)	936)	422)	242)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Tesla Inc. cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Tesla Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Current portion of debt and finance leases	2,373)	1,502)	1,589)	2,132)	1,785)
Debt and finance leases, net of current portion	2,857)	1,597)	5,245)	9,556)	11,634)
Operating lease liability¹	4,343)	2,649)	2,039)	1,540)	1,184)
Total reported debt & leases	9,573)	5,748)	8,873)	13,228)	14,603)
Stockholders’ equity	62,634)	44,704)	30,189)	22,225)	6,618)
Net deferred tax (assets) liabilities²	(6,652)	(247)	(65)	84)	35)
Deferred revenue³	6,115)	4,551)	3,499)	2,742)	2,370)
Accrued warranty reserve⁴	5,152)	3,505)	2,101)	1,468)	1,089)
Equity equivalents⁵	4,615)	7,809)	5,535)	4,294)	3,494)
Accumulated other comprehensive (income) loss, net of tax⁶	143)	361)	(54)	(363)	36)
Redeemable noncontrolling interests in subsidiaries	242)	409)	568)	604)	643)
Noncontrolling interests in subsidiaries	733)	785)	826)	850)	849)
Adjusted stockholders’ equity	68,367)	54,068)	37,064)	27,610)	11,640)
Construction in progress⁷	—)	(4,263)	(5,559)	(1,621)	(764)
Short-term investments⁸	(12,696)	(5,932)	(131)	—)	—)
Invested capital	65,244)	49,621)	40,247)	39,217)	25,479)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of deferred revenue.

⁴ Addition of accrued warranty reserve.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of construction in progress.

⁸ Subtraction of short-term investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Tesla Inc. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Tesla Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	608,072)	608,072)	÷	618,051)	=	0.98	0.98	×	26.74%	=	26.31%
Debt and finance leases³	5,636)	5,636)	÷	618,051)	=	0.01	0.01	×	6.41% × (1 – 21.00%)	=	0.05%
Operating lease liability⁴	4,343)	4,343)	÷	618,051)	=	0.01	0.01	×	5.60% × (1 – 21.00%)	=	0.03%
Total:	618,051)					1.00					26.38%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	548,086)	548,086)	÷	554,020)	=	0.99	0.99	×	26.74%	=	26.45%
Debt and finance leases³	3,285)	3,285)	÷	554,020)	=	0.01	0.01	×	5.20% × (1 – 21.00%)	=	0.02%
Operating lease liability⁴	2,649)	2,649)	÷	554,020)	=	0.00	0.00	×	5.30% × (1 – 21.00%)	=	0.02%
Total:	554,020)					1.00					26.50%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	937,753)	937,753)	÷	948,530)	=	0.99	0.99	×	26.74%	=	26.43%
Debt and finance leases³	8,738)	8,738)	÷	948,530)	=	0.01	0.01	×	5.50% × (1 – 21.00%)	=	0.04%
Operating lease liability⁴	2,039)	2,039)	÷	948,530)	=	0.00	0.00	×	5.00% × (1 – 21.00%)	=	0.01%
Total:	948,530)					1.00					26.48%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	828,766)	828,766)	÷	864,739)	=	0.96	0.96	×	26.74%	=	25.63%
Debt and finance leases³	34,433)	34,433)	÷	864,739)	=	0.04	0.04	×	6.02% × (1 – 21.00%)	=	0.19%
Operating lease liability⁴	1,540)	1,540)	÷	864,739)	=	0.00	0.00	×	5.80% × (1 – 21.00%)	=	0.01%
Total:	864,739)					1.00					25.82%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	145,799)	145,799)	÷	162,819)	=	0.90	0.90	×	26.74%	=	23.94%
Debt and finance leases³	15,836)	15,836)	÷	162,819)	=	0.10	0.10	×	6.36% × (1 – 21.00%)	=	0.49%
Operating lease liability⁴	1,184)	1,184)	÷	162,819)	=	0.01	0.01	×	6.50% × (1 – 21.00%)	=	0.04%
Total:	162,819)					1.00					24.47%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt and finance leases. See details »

⁴ Operating lease liability. See details »

Tesla Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(5,904)	1,727)	(3,444)	(7,836)	(5,333)
Invested capital²	65,244)	49,621)	40,247)	39,217)	25,479)
Performance Ratio
Economic spread ratio³	-9.05%	3.48%	-8.56%	-19.98%	-20.93%
Benchmarks
Economic Spread Ratio, Competitors⁴
Ford Motor Co.	-5.98%	-5.82%	-0.70%	-6.33%	-6.01%
General Motors Co.	-1.20%	-1.99%	-0.20%	-3.43%	-3.39%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -5,904 ÷ 65,244 = -9.05%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Tesla Inc. economic spread ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Tesla Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(5,904)	1,727)	(3,444)	(7,836)	(5,333)

Revenues	96,773)	81,462)	53,823)	31,536)	24,578)
Add: Increase (decrease) in deferred revenue	1,564)	1,052)	757)	372)	749)
Adjusted revenues	98,337)	82,514)	54,580)	31,908)	25,327)
Performance Ratio
Economic profit margin²	-6.00%	2.09%	-6.31%	-24.56%	-21.06%
Benchmarks
Economic Profit Margin, Competitors³
Ford Motor Co.	-6.26%	-6.40%	-0.88%	-9.27%	-7.26%
General Motors Co.	-1.37%	-2.37%	-0.29%	-4.83%	-4.02%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -5,904 ÷ 98,337 = -6.00%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Tesla Inc. economic profit margin improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Tesla Inc. (NASDAQ:TSLA)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin