GLJ Research analyst Gordon Johnson reiterated a Sell rating and $87.00 price target on Tesla (NASDAQ: TSLA) on the belief that the regulatory tax credits that pulled the bottom line into the black may have to be reversed in the coming quarters. Based on his analysis of the financials and commentary from the call, he believes 30% of TSLA's receivable balance, or $448mn, was from a mystery account. If he is right, up to half of 1Q20, and all of TSLA's 2Q20 regulatory credit revenues are still in accounts receivable ("A/R").

The analyst stated "In its efforts to eke out a fourth consecutive quarter of profit in 2Q20, we believe TSLA resorted to somewhat-deceptive accounting practices, primarily aimed at S&P 500 inclusion. And, brazenly, based on commentary provided by TSLA on last night's call, we believe the company has plans on reversing these tactics as soon as 3Q20".

He went on to discuss the reversal, stating "we see TSLA going back into structural losses in 3Q20 (and the foreseeable future) vs. the current Consensus est. for 3Q20 and 4Q20 GAAP EPS of $0.70/shr and $1.86/shr, respectively. Overall, with TSLA's 2Q20 revenue down -4.9% y/y, despite eight price cuts thus far this year, we see outsized risk to the hyper-growth narrative on the horizion. In short, it seems (our opinion) managing its stock for S&P 500 inclusion is the real product here, not the cars the company actually sells".

Further, the analyst highlighted that rival FCA has stated that they plan on spending $1.1 billion on regulatory credits from 2020-2023. This compares to Tesla, which has recognized nearly $800 million in 6 months, with 40% in A/R. He said, "That’s pretty important!"

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Shares of Tesla closed at $1661.00 yesterday.