Tesla Omits $97 Million Crypto Loss from Earnings Report, Drawing Regulatory Concerns
Published: April 25, 2025 | By Kurt Robson
In its latest earnings report, Tesla has come under scrutiny for omitting a significant $97 million loss from its cryptocurrency holdings. The decision to exclude these losses has raised alarms, particularly given the parallels to the actions of Marathon Digital, which faced a two-year investigation by the U.S. Securities and Exchange Commission (SEC) for similar financial reporting practices.
Earnings Report Highlights
Tesla’s adjusted earnings report announced a figure of approximately $900 million, which is notably more than double its disclosed net income of $400 million. This adjustment was applied by excluding the substantial loss from cryptocurrency investments and expenses linked to stock-based compensation. The omission of these financial elements helped the company present a far stronger financial outlook than what could be interpreted from the reported figures alone.
According to a report by Bloomberg, Tesla’s accounting practices during this period have opened them to potential allegations of misleading investors. When Bitcoin prices surged towards the end of 2024, Tesla had previously recorded a $600 million gain within its non-GAAP earnings, which further complicates how the company is managing its crypto assets in their financial disclosures.
Comparison to Marathon Digital
The practices employed by Tesla closely resemble those of Marathon Digital in 2021, which prompted an intensive review by the SEC. Marathon was criticized for not incorporating the fluctuations in the value of its crypto holdings into its adjusted earnings. Regulators argued that such omissions presented a distorted view of the company’s financial health, ultimately affecting investor decisions.
The SEC concluded its investigation of Marathon Digital in April 2024, highlighting serious concerns over undisclosed long-term debts and inconsistencies regarding convertible notes in the company’s filings. As the SEC has intensified its oversight of cryptocurrency-related financial disclosures, Tesla’s recent actions could attract similar scrutiny.
Elon Musk’s Leadership amid Challenges
Elon Musk, Tesla’s CEO, has recently signaled that he intends to devote more attention to the company amid its declining performance. Following the release of the earnings report, Musk acknowledged that his engagement with Tesla had been compromised, partly due to his responsibilities related to government initiatives.
Tesla reported a net income of $409 million for the latest quarter, a sharp decline from $1.4 billion reported in the first quarter of 2024. This downward trend can be attributed to several factors, including decreasing sales and growing public backlash against Musk’s political affiliations. Protests have unfolded at Tesla dealerships across the U.S., with some escalating to vandalism. Moreover, the firm faces intensified competition from other manufacturers, particularly Chinese automaker BYD, which has further complicated its market position.
Looking Forward
As Tesla navigates these challenges, the implications of its financial reporting strategies, particularly regarding cryptocurrencies, are likely to be closely monitored by analysts and regulators alike. The forthcoming quarters will be critical for Tesla not only to enhance its financial accountability but also to restore investor confidence amid a rapidly changing automotive landscape.
The company’s future performance remains to be seen as it grapples with internal and external pressures while attempting to stabilize its growth trajectory.
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