Tesla reported income from operations of $4,355 million for 2025. Add the $6,148 million of depreciation, amortisation and impairment from its cash flow statement. The result is $10,503 million. That figure is earnings before interest, taxes, depreciation and amortisation (EBITDA). It is 2.4 times operating income. The numbers come from Tesla's annual report (Form 10-K) for the year ended 31 December 2025.
Tesla's income statement has no line called EBITDA. Three measures built from the same accounts give different answers, from $10,503 million to $14,596 million. Tesla also spent $8,527 million on property and equipment during 2025.
What is EBITDA? EBITDA stands for earnings before interest, taxes, depreciation and amortisation. It is operating income with the cost of using up assets added back. US accounting rules do not define it.
Tesla's 2025 operating income was $4,355 million, while its EBITDA was $10,503 million.
Three EBITDA-based measures built from Tesla's accounts give $10,503 million, $11,764 million and $14,596 million. The last is Adjusted EBITDA, which also adds back stock-based compensation.
Tesla's 2025 spending on property and equipment was $8,527 million, which is 81.2% of its EBITDA.
What does EBITDA stand for?
EBITDA stands for earnings before interest, taxes, depreciation and amortisation.
Interest is the cost of borrowing. Taxes are the income tax expense on profit.
Depreciation spreads the cost of a physical asset, such as a factory, over the years the company uses it. Amortisation does the same for an intangible asset, such as acquired technology.
Impairment is a write-down when a company judges an asset worth less than its recorded value. Tesla's cash flow statement groups the three in one line, called "Depreciation, amortization and impairment".
Operating income is revenue less the cost of making and selling the product and running the business. It already deducts depreciation, amortisation and impairment.
Is EBITDA a GAAP measure?
No. Generally Accepted Accounting Principles (GAAP) are the US accounting rules. They do not define EBITDA. In Release 33-8176, effective 28 March 2003, the Securities and Exchange Commission (SEC) gave EBITDA as an example of a measure "not presented in accordance with GAAP".
The same release exempted EBIT (earnings before interest and taxes) and EBITDA from a rule that bars non-GAAP liquidity measures from excluding charges that need cash settlement. The SEC gave this reason: their "wide and recognized existing use". A company that presents EBITDA must still reconcile it to the most directly comparable GAAP measure.
Tesla's 10-K does not show EBITDA in its financial statements. The word appears 11 times in the report, all of them as "Adjusted EBITDA" in the table of milestones for the 2025 CEO Performance Award and its footnotes.
How do you calculate EBITDA for Tesla?
Two routes start from Tesla's 2025 statements. Route one starts at operating income and adds the $6,148 million. Route two starts at net income, the bottom line. It adds back income tax, interest expense and the same $6,148 million.
Tesla, year ended 31 December 2025 | $ millions |
|---|---|
Route one | |
Income from operations | 4,355 |
Plus: depreciation, amortisation and impairment | 6,148 |
EBITDA, route one | 10,503 |
Route two | |
Net income | 3,855 |
Plus: provision for income taxes | 1,423 |
Plus: interest expense | 338 |
Plus: depreciation, amortisation and impairment | 6,148 |
EBITDA, route two | 11,764 |
Difference between the routes | 1,261 |
Made up of: interest income | 1,680 |
And: other (expense) income, net | −419 |
Source: Tesla Form 10-K for 2025; YX Insights calculation
The two routes differ by $1,261 million. Route two starts from net income of $3,855 million, which includes the $61 million that belongs to noncontrolling interests (outside owners of subsidiaries).
Route two starts below operating income, so interest income of $1,680 million stays inside it. So does other expense, net, which was a $419 million expense in 2025. The 10-K says this line consists of foreign exchange gains and losses and fair value changes on digital assets. Route one counts neither.
Why does one company have several EBITDA figures?
Chart 1 puts four profit measures for 2025 side by side. Operating income is $4,355 million. EBITDA is $10,503 million by route one and $11,764 million by route two. The fourth bar is Adjusted EBITDA, worded as Tesla's 10-K words it.
Source: Tesla Form 10-K for 2025; YX Insights calculation
The 10-K defines Adjusted EBITDA for the CEO award. The definition starts from net income attributable to common stockholders. It adds back interest expense, income taxes, depreciation, amortization and impairment, stock-based compensation and digital assets gains and losses. It applies the measure to the four consecutive quarters before a determination date.
We applied that wording to calendar 2025. Net income attributable to common stockholders was $3,794 million.
We added $338 million of interest expense, $1,423 million of income tax and $6,148 million of depreciation, amortisation and impairment. We then added $2,825 million of stock-based compensation and a $68 million digital assets loss. The total is $14,596 million, which is 3.4 times operating income.
The 10-K gives the definition only, so the $14,596 million is our calculation. Stock-based compensation is pay given in shares. Adjusted EBITDA adds it back, while routes one and two leave it as a cost.
What does EBITDA leave out?
EBITDA leaves out interest, tax and the cost of the assets. Interest and tax are costs. Tesla's 2025 provision for income taxes was $1,423 million, while its interest expense was $338 million.
Depreciation stands for spending that has already happened. Capital spending is the money a company puts into long-lived assets. The cash flow statement line "Purchases of property and equipment excluding finance leases, net of sales" was $8,527 million in 2025. That is 81.2% of EBITDA.
Source: Tesla Form 10-K for 2025; YX Insights calculation
Chart 2 starts at operating income of $4,355 million and adds $6,148 million to reach EBITDA. It then deducts capital spending of $8,527 million, which leaves $1,976 million. That is 45.4% of operating income.
Capital spending was above the depreciation, amortisation and impairment line in all three years of the 10-K, 2023 to 2025. EBITDA less capital spending therefore ran below operating income in each of them.
EBITDA is also not cash flow. Net cash provided by operating activities was $14,747 million in 2025, which is 1.4 times EBITDA. Our post on how to read a cash flow statement shows where the cash figure comes from. Free cash flow subtracts capital spending from it.
How did Tesla's EBITDA change from 2023 to 2025?
Chart 3 shows three fiscal years, all ended 31 December. Operating income fell in both years, from $8,891 million in 2023 to $7,076 million in 2024 and $4,355 million in 2025. That is a 51.0% fall over the two years.
Source: Tesla Form 10-K for 2025; YX Insights calculation
EBITDA also fell in both years, from $13,558 million to $12,444 million and then $10,503 million. That is a fall of 22.5% over the two years, less than half the fall in operating income.
The difference comes from the add-back. Depreciation, amortisation and impairment rose 31.7%, from $4,667 million to $6,148 million. It added $1,481 million to EBITDA while operating income lost $4,536 million.
A margin is a share of revenue. Between 2023 and 2025, Tesla's operating margin fell from 9.2% to 4.6%, while its EBITDA margin fell from 14.0% to 11.1%.
Over the three years EBITDA totalled $36,505 million and capital spending $28,768 million, or 78.8% of it.
How is EBITDA used in valuation?
EV/EBITDA divides enterprise value (EV) by EBITDA. In its simplest form, enterprise value is the value of a company's shares plus its debt less its cash. Our posts on enterprise value and EV/EBITDA cover the ratio.
A multiple built on EBITDA carries three choices. The first is the starting line, operating income or net income. The second is what else the company adds back, such as stock-based compensation. The third is capital spending, set against the depreciation that EBITDA removes.
For the lines above and below operating income, see our post on how to read an income statement.
EBITDA is operating income plus depreciation, amortisation and impairment. Tesla's 2025 EBITDA was $10,503 million, 2.4 times its operating income of $4,355 million. In the same year Tesla spent $8,527 million on property and equipment.
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Common questions about EBITDA
How do you calculate EBITDA?
Add depreciation, amortisation and impairment to operating income, or add interest expense, income tax and the same charge to net income. Tesla's 2025 accounts give $10,503 million by the first route and $11,764 million by the second. The routes differ because net income also includes interest income and other items.
Is EBITDA the same as operating income?
No. Operating income is profit after depreciation and amortisation, while EBITDA adds those charges back. Tesla's 2025 operating income was $4,355 million and its EBITDA was $10,503 million. The gap is the $6,148 million of depreciation, amortisation and impairment on its cash flow statement.
What is a good EBITDA margin?
No fixed level counts as a good EBITDA margin. EBITDA margin is EBITDA divided by revenue. Tesla's 2025 EBITDA margin was 11.1% of $94,827 million of revenue, against an operating margin of 4.6%. Its operating margin fell from 9.2% in 2023, while its EBITDA margin fell from 14.0%.
Does EBITDA include capital spending?
No. EBITDA leaves out interest, tax and the cost of using assets. It ignores capital spending too. Tesla's 2025 capital spending was $8,527 million, or 81.2% of its EBITDA. Its provision for income taxes was $1,423 million and its interest expense was $338 million.
DISCLAIMER: This article is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
