Tesla (TSLA) Interest Coverage

: 33.84 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Tesla's Operating Income for the three months ended in Dec. 2023 was $2,064 Mil. Tesla's Interest Expense for the three months ended in Dec. 2023 was $-61 Mil. Tesla's interest coverage for the quarter that ended in Dec. 2023 was 33.84. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Tesla Inc has enough cash to cover all of its debt. Its financial situation is stable.

The historical rank and industry rank for Tesla's Interest Coverage or its related term are showing as below:

TSLA' s Interest Coverage Range Over the Past 10 Years
Min: 0.12 Med: 17.51 Max: 72.42
Current: 56.99

TSLA's Interest Coverage is ranked better than
85.45% of 1031 companies
in the Vehicles & Parts industry
Industry Median: 7.57 vs TSLA: 56.99

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Tesla Interest Coverage Historical Data

The historical data trend for Tesla's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Tesla Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

0.12

2.67

17.51

72.42

56.99

Tesla Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																119.24	91.86	85.68	46.42	33.84

Competitive Comparison

For the Auto Manufacturers subindustry, Tesla's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Tesla Interest Coverage Distribution

For the Vehicles & Parts industry and Consumer Cyclical sector, Tesla's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Tesla's Interest Coverage falls into.

Tesla Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Tesla's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Tesla's Interest Expense was $-156 Mil. Its Operating Income was $8,891 Mil. And its Long-Term Debt & Capital Lease Obligation was $6,528 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	8891	/	-156
	=	56.99

Tesla's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Tesla's Interest Expense was $-61 Mil. Its Operating Income was $2,064 Mil. And its Long-Term Debt & Capital Lease Obligation was $6,528 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	2064	/	-61
	=	33.84

The higher the ratio, the stronger the company's Financial Strength is.

Tesla (NAS:TSLA) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Tesla Interest Coverage Related Terms

Thank you for viewing the detailed overview of Tesla's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Tesla (TSLA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Tesla Inc (NAS:TSLA) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

TSLA:Poland TSLA:Peru TSLA:Mexico TSLA_KZ:Kazakhstan TSLA:Italy TL0d:UK 0R0X:UK TL01:Germany TL0:Germany TL0:Germany TL0:Germany TL0:Germany TSLA:Canada TSLA34:Brazil TSLA:Austria TSLA:Argentina

Address

1 Tesla Road, Austin, TX, USA, 78725

Website

https://www.tesla.com

Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. The company sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. Tesla has multiple vehicles in its fleet, which include luxury and midsize sedans and crossover SUVs. The company also plans to begin selling more affordable sedans and small SUVs, a light truck, a semi truck, and a sports car. Global deliveries in 2022 were a little over 1.3 million vehicles.

Executives

Vaibhav Taneja	officer: Chief Accounting Officer	3500 DEER CREEK ROAD, PALO ALTO CA 94304
Xiaotong Zhu	officer: SVP, Automotive	1 TESLA ROAD, AUSTIN TX 78725
Andrew D Baglino	officer: SVP Powertrain and Energy Eng.	3500 DEER CREEK ROAD, FREMONT CA 94538
Zachary Kirkhorn	officer: Chief Financial Officer	3500 DEER CREEK ROAD, PALO ALTO CA 94304
Kimbal Musk	director	C/O TESLA MOTORS, INC., 3500 DEER CREEK ROAD, PALO ALTO CA 94304
Elon Musk	director, 10 percent owner, officer: CEO	C/O TESLA MOTORS, INC., 3500 DEER CREEK ROAD, PALO ALTO CA 94304
Joseph Gebbia	director	C/O AIRBNB, INC., 888 BRANNAN STREET, SAN FRANCISCO CA 94103
Kathleen Wilson-thompson	director	PO BOX 3599, BATTLE CREEK MI 49016-3599
Robyn M Denholm	director	4150 NETWORK CIRCLE, SANTA CLARA CA 95054
Ira Matthew Ehrenpreis	director	100 SHORELINE HWY, SUITE 282, BLDG. B, MILL VALLEY CA 94941
Jerome M Guillen	officer: VP Service and Sales Ops	3500 DEER CREEK RD., PALO ALTO CA 94304
Antonio J. Gracias	director	C/O VALOR EQUITY PARTNERS, 200 SOUTH MICHIGAN AVENUE, SUITE 1020, CHICAGO IL 60604
Hiromichi Mizuno	director	1-2-33-A504, KOMAZAWA, SETAGAYA, TOKYO M0 154-0012
Lawrence Joseph Ellison	director	C/O DELPHI ASSET MGMT CORPORATION, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Stephen T Jurvetson	director	2882 SAND HILL ROAD, SUITE 150, MENLO PARK CA 94025