Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Tesla Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of long-term investment activity ratios reveals several noteworthy trends between 2021 and 2025. Generally, the observed ratios indicate a decreasing efficiency in asset utilization over the period. The rate of decline appears to accelerate in the later years of the observed timeframe.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 2.85 in 2021 to 2.33 in 2025. This indicates a diminishing ability to generate revenue from fixed assets. The ratio peaked at 3.46 in 2022 before experiencing a consistent decline. The decrease suggests either a slowdown in sales relative to fixed asset investment, or a significant increase in the value of fixed assets without a corresponding increase in revenue.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- A similar downward trend is evident in the net fixed asset turnover ratio that incorporates operating leases and right-of-use assets. Starting at 2.58 in 2021, the ratio fell to 2.03 by 2025. This mirrors the trend observed in the standard net fixed asset turnover, suggesting the inclusion of lease obligations does not fundamentally alter the overall pattern of decreasing asset efficiency. The peak value of 3.12 was also observed in 2022, followed by a consistent decline.
- Total Asset Turnover
- The total asset turnover ratio demonstrates a consistent decline from 0.87 in 2021 to 0.69 in 2025. This signifies a decreasing efficiency in utilizing all assets to generate revenue. The rate of decline appears to be accelerating, with a more pronounced decrease between 2023 and 2025. This suggests a potential issue with overall asset management or a shift in asset composition towards less revenue-generating assets.
- Equity Turnover
- The equity turnover ratio also exhibits a declining trend, moving from 1.78 in 2021 to 1.15 in 2025. This indicates that the company is generating less revenue for each dollar of equity. The decrease suggests a potential weakening in the relationship between equity financing and revenue generation, or a substantial increase in equity without a corresponding increase in sales. The decline is relatively consistent throughout the period.
Collectively, these ratios suggest a weakening trend in asset utilization efficiency. Further investigation is warranted to understand the underlying causes of these declines, including potential changes in capital expenditure strategies, shifts in revenue generation models, or broader economic factors impacting sales.
Net Fixed Asset Turnover
Tesla Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Automobiles & Components | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover = Revenues ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased significantly, followed by a decline, suggesting evolving efficiency in utilizing fixed assets to generate revenue.
- Overall Trend
- The net fixed asset turnover ratio demonstrates an initial increase from 2021 to 2022, peaking at 3.46. Subsequently, the ratio decreased consistently from 2022 through 2025, ending at 2.33. This indicates a diminishing ability to generate revenue from each dollar invested in fixed assets.
- Revenue Growth & Ratio Relationship (2021-2022)
- Between 2021 and 2022, revenues increased substantially, from US$53,823 million to US$81,462 million. This revenue growth coincided with an increase in the net fixed asset turnover ratio, suggesting that the company effectively leveraged its existing fixed assets to capitalize on increased demand. The increase in property, plant, and equipment, net, was proportionally less than the revenue increase.
- Ratio Decline (2022-2025)
- From 2022 to 2025, while revenues experienced moderate fluctuations, the net fixed asset turnover ratio consistently declined. This decrease occurred alongside continued increases in property, plant, and equipment, net. This suggests that investments in fixed assets may not be translating into proportional revenue gains, potentially indicating over-investment in fixed assets relative to sales, inefficiencies in asset utilization, or a shift in the revenue generation model.
- Recent Performance (2024-2025)
- The most recent two years show a continued downward trend in the ratio. Revenues decreased slightly from US$97,690 million in 2024 to US$94,827 million in 2025, while property, plant, and equipment, net, continued to rise. This reinforces the observation that the company is generating less revenue per dollar of fixed assets, potentially warranting further investigation into capital expenditure efficiency.
The observed trend suggests a potential need to evaluate capital allocation strategies and asset utilization efficiency to optimize returns on fixed asset investments.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Tesla Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease right-of-use assets | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Automobiles & Components | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a fluctuating trend in net fixed asset turnover over the five-year period. Revenues demonstrate consistent growth from 2021 to 2023, followed by modest growth in 2024 and a slight decrease in 2025. Simultaneously, net fixed assets, inclusive of operating leases and right-of-use assets, exhibit a continuous increase throughout the period.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 2.58 in 2021 to 2.03 in 2025. An initial increase was observed from 2021 to 2022, reaching a peak of 3.12. Subsequently, the ratio declined in 2023 to 2.85, and continued to decrease in 2024 and 2025, reaching 2.38 and 2.03 respectively.
The increasing value of net fixed assets, coupled with the eventual slowing of revenue growth and subsequent decline, suggests a diminishing efficiency in utilizing fixed assets to generate revenue. While revenue increased substantially between 2021 and 2023, the rate of increase in fixed assets outpaced revenue growth in the later years, contributing to the observed decrease in the turnover ratio. The decrease in 2025, despite relatively stable fixed assets, indicates a potential slowdown in sales relative to the asset base.
- Revenue Trend
- Revenues increased from US$53,823 million in 2021 to US$96,773 million in 2023, representing significant growth. Growth slowed to US$97,690 million in 2024 and then decreased slightly to US$94,827 million in 2025.
- Fixed Asset Trend
- Net fixed assets increased consistently from US$20,900 million in 2021 to US$46,670 million in 2025, indicating substantial investment in property, plant, and equipment, including operating leases and right-of-use assets.
The combined effect of these trends suggests that while the company continues to invest in its fixed asset base, the returns generated from those assets, as measured by the net fixed asset turnover ratio, are diminishing. Further investigation may be warranted to understand the drivers behind the slowing revenue growth and the increasing fixed asset base.
Total Asset Turnover
Tesla Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| Total Asset Turnover, Sector | ||||||
| Automobiles & Components | ||||||
| Total Asset Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased, followed by a decline, suggesting changes in the efficiency with which assets are utilized to generate sales.
- Overall Trend
- A general downward trend in total asset turnover is apparent from 2021 to 2025. While there was an initial improvement, the ratio decreased consistently in the latter years of the observed period.
- Initial Increase (2021-2022)
- The total asset turnover ratio increased from 0.87 in 2021 to 0.99 in 2022. This indicates improved efficiency in asset utilization, meaning the company generated more revenue per dollar of assets during this period. This improvement could be attributed to increased sales volume or more effective asset management.
- Subsequent Decline (2022-2025)
- Following the peak in 2022, the ratio decreased to 0.91 in 2023, 0.80 in 2024, and further to 0.69 in 2025. This decline suggests a diminishing ability to generate sales from its asset base. Potential reasons include an increase in assets without a corresponding increase in revenue, or a slowdown in sales growth. The most significant decrease occurred between 2024 and 2025.
- Revenue and Asset Relationship
- Revenues increased significantly from 2021 to 2023, but the growth rate slowed in 2024 and experienced a slight decrease in 2025. Simultaneously, total assets consistently increased throughout the period. The combination of slowing revenue growth and continued asset accumulation likely contributed to the observed decline in the total asset turnover ratio.
The decreasing trend in the total asset turnover ratio warrants further investigation to determine the underlying causes and potential implications for future performance. It is important to assess whether the asset increases are strategic investments that are expected to generate future returns, or if they represent inefficiencies in asset management.
Equity Turnover
Tesla Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| Equity Turnover, Sector | ||||||
| Automobiles & Components | ||||||
| Equity Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Equity turnover = Revenues ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio demonstrates a consistent decline over the five-year period. Revenues increased significantly from 2021 to 2022, and continued to grow through 2023, before stabilizing and experiencing a slight decrease in 2025. However, stockholders’ equity experienced more substantial growth throughout the period, resulting in the observed trend in equity turnover.
- Equity Turnover Trend
- The equity turnover ratio decreased from 1.78 in 2021 to 1.15 in 2025. This indicates that the company is generating less revenue for each dollar of stockholders’ equity. The most significant decrease occurred between 2023 and 2025, falling from 1.55 to 1.15.
- Revenue Growth vs. Equity Growth
- While revenues increased from $53.823 billion to $94.827 billion over the period, the growth rate of stockholders’ equity exceeded that of revenues. Stockholders’ equity grew from $30.189 billion to $82.137 billion. This disparity in growth rates is the primary driver of the declining equity turnover ratio.
- Implications of Declining Ratio
- A decreasing equity turnover ratio could suggest that the company is becoming less efficient in utilizing its equity to generate sales. Alternatively, it could indicate that the company is retaining a larger portion of its earnings, leading to increased equity. Further investigation into the reasons behind the equity growth is warranted to determine the underlying cause of this trend.
The observed pattern suggests a shift in the company’s financial leverage or investment strategy. While revenue continues to grow, the increasing equity base is diluting the impact on the equity turnover ratio. Continued monitoring of this ratio, alongside other financial metrics, is recommended to assess the long-term implications of this trend.