Key Takeaways
- Tesla’s omission of a significant crypto loss from its earnings report echoes MARA’s strategy in 2021.
- This led to a two-year investigation by the U.S. Securities and Exchange Commission.
- Elon Musk has vowed to spend more time away from the White House following Tesla’s weakening performance.
In its latest earnings report, Tesla omitted a $97 million loss from its crypto holdings, instead using financial adjustments that boosted its pro forma earnings by approximately 12%.
Tesla reported adjusted earnings of around $900 million, more than double its official net income of $400 million.
This concealment of significant crypto-related losses mirrors a similar move by MARA, formerly Marathon Digital, in 2021, which drew intense scrutiny from the U.S. Securities and Exchange Commission (SEC).
Tesla Omits Crypto Losses
According to a Bloomberg report, Tesla’s earnings filing failed to disclose a substantial loss from crypto assets and expenses related to stock-based compensation.
By excluding these two factors, the company presented a far healthier financial picture than what would otherwise have been one of its weakest quarters in years.
When Bitcoin prices surged in late 2024, Tesla reflected a $600 million gain in its non-GAAP earnings. The inconsistent treatment of crypto gains and losses raises the risk of regulatory scrutiny from the SEC.
In late 2023, the Financial Accounting Standards Board updated its rules to require all companies to account for the volatility of crypto assets in their earnings reports.
Parallels to MARA
Tesla’s approach is reminiscent of MARA’s financial reporting practices, which triggered a two-year SEC investigation beginning in 2022.
The agency criticized MARA for omitting the value changes of its crypto holdings from its adjusted earnings, arguing that such omissions could mislead investors about the company’s actual financial condition.
Regulators also raised concerns over undisclosed long-term debt and inconsistencies regarding convertible notes in its filings.
The SEC’s review concluded in April 2024.
Elon Musk Promises More Focus on Tesla
Tesla’s reported net income of $409 million for the quarter marks a sharp decline from the $1.4 billion it posted in the first quarter of 2024.
Following Tuesday’s earnings release, Musk spoke in a conference call about spending more time at Tesla.
The Tesla CEO has repeatedly shared that his attention was being spread thin since taking on a new role with the White House.
Tesla’s sales have declined amid growing backlash over Musk’s close alignment with President Donald Trump and his involvement in the Department of Government Efficiency’s cost-cutting initiatives.
Protests have erupted at Tesla dealerships across the U.S. in recent months, with some demonstrations escalating into vandalism.
Meanwhile, growing competition from Chinese automaker BYD and other global manufacturers has further intensified the pressure on Tesla’s earnings.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
