Tesla takes on $30B in credit as it approaches unprofitability

Tesla has arranged $30 billion in credit facilities from Citi and Wells Fargo with one- to five-year terms, replacing a prior $5 billion line, even though it reported about $43 billion in cash. The move comes as revenue growth has stalled - sales fell about 1% in 2024 - and profitability has been thin, often sustained by one-time accounting items. Cash flow turned negative in the most recent quarter for the first time since early 2024. Tesla says it does not expect to draw on the new lines in 2026, but capital spending has surged: quarterly CapEx more than doubled and management projects roughly $25 billion in CapEx for 2026 versus $8.5 billion in 2025, with analysts expecting similarly high spending in 2027.

The new financing amounts to roughly a quarter of current annual revenue and is large relative to the company’s recent slim profits, raising questions about how Tesla will fund ambitious projects and operations if returns remain weak. Much of the increased spending targets long-promised products and initiatives that have yet to deliver significant revenue - examples include a stalled autonomous taxi concept, a slow-ramping Semi, and a Roadster that has generated more hype than volume. If those investments don’t materialize into profitable growth, additional financing may be required.