Tesla is becoming unprofitable again: Exploding investments, shrinking profits

According to a recent SEC filing, Tesla has arranged credit lines totaling $30 billion with Citi (Citigroup, one of the largest banks in the US) and Wells Fargo (also one of the largest US banks). The facilities have terms ranging from one to five years. This replaces a previously reported $5 billion credit line.

Arranging a credit line does not necessarily mean that Tesla will take on more debt. It is more like a credit facility or an authorized overdraft that Tesla can theoretically draw on if needed, giving the company an additional financial cushion.

Tesla's profits are currently under significant pressure. After years of sustained growth, the company's expansion has slowed dramatically: following revenue growth of 38% in 2023, Tesla's business declined by around 1% for the first time in 2024. As a result, profits have also fallen, although they remain in the range of several hundred million euros.

At the same time, capital expenditures have risen sharply. The company expects CapEx (simplified: investment spending) to reach $25 billion in 2026, up from $8.5 billion in 2025, for ideas that include questionable projects such as flying cars and a robot army. Investments now exceed operating cash flow as profits decline.

The new $30 billion credit agreement comes despite Tesla still having around $43 billion in cash reserves, apparently no longer enough to cover the investments expected from 2027 onward.