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Over the last four months, Tesla’s shares have nearly tripled in value after the company’s quarterly earnings twice beat Wall Street’s expectations. But some Tesla critics allege that those profits were the result of misleading accounting.

They claim that Tesla has inflated its profits by artificially lowering its “warranty reserve,” the money it sets aside to pay for future repairs to cars covered by warranties.

In every quarter last year, Tesla earmarked less money per car to cover repairs than in the previous quarter, according to calculations by Fortune that were based on the company’s regulatory filings. If Tesla had continued to set aside the same amount of money per car for warranties as it did in late 2018, its 2019 profits would have been reduced by tens of millions of dollars.

In its most recent quarter, for example, Tesla reduced warranty funding per car by 6% compared to the previous quarter. That reduction alone, according to Fortune’s calculations, added close to $10 million to the company’s fourth-quarter profits.

Tesla did not respond to multiple requests for comment about its accounting changes. PwC, the accounting firm responsible for auditing Tesla’s financial reports, said it was unable to comment.

Tesla could have a reasonable explanation for reducing its warranty funding. For example, it may have determined that its newer cars require less long-term maintenance.

For its part, the Securities and Exchange hasn’t questioned Tesla about its maintenance funding for the cars it sells. In September, the agency did seek information about how Tesla classifies the cost of repairing leased vehicles. Tesla responded by arguing that its earmarks for lease maintenance was in line with accounting standards. The SEC completed its review without taking further action.

But Tesla’s critics, mainly smaller investors who organize on Twitter and have only limited support from institutional analysts, see something nefarious in the company’s warranty accounting more broadly. Some of those critics are short sellers, meaning that they profit when a company’s stock declines, motivating them to dig for bad news, or in some cases, cast doubts on justifiable accounting.

“By underestimating your warranty reserve, you’re understating the cost of goods sold,” says Lawrence J. Fossi, a retired family fund manager and business attorney who writes about Tesla analysis under the pseudonym Montana Skeptic for investing blog Seeking Alpha while holding a short position in Tesla. “It would inflate [Tesla’s] gross margins, and also their bottom line. And if you’re in growth mode, it’s a significant distortion.”

Is Tesla understating its future warranty obligations?

Most new cars sold in the developed world come with warranties – commitments by manufacturer to fix the car for a certain amount of time or miles driven. To meet that commitment, auto manufacturers set aside a percentage of the proceeds from each sale to pay for future service.

This ‘warranty reserve’ is considered a cost, reducing the profitability of each car in proportion to the predicted amount of money needed for future warranty service. Tesla’s warranties are for as long as eight years, or 100,000 to 150,000 miles, meaning most of the cars it has ever sold—as well as some certified pre-owned cars it has sold more than once—are still under warranty.

Getting a clear picture of the total costs is complex because the numbers provided by Tesla lack detail and include some unrelated expenses. Most importantly, Tesla’s maintenance cost for leased cars, a growing portion of its business, isn’t included in its warranty reserve, and instead appears quarterly under a different line item.

A portion of Tesla’s warranty earmarks also covers non-automotive products such as solar panels and batteries used to store power for buildings. Similar to Tesla’s automotive business, some of its energy products are sold under warranty, while other products are leased, and therefore are not under warranty.

Therefore, it’s difficult to know how much Tesla’s energy business contributes to the overall warranty reserve. However, energy makes up only 6% of the company’s current revenue, and was effectively flat for 2019. So it is unlikely to have accounted for substantial changes to warranty reserve levels.

Additionally, Tesla’s tweaks to its warranty reserve may also reflect foreign exchange fluctuations, or other unknown factors.

With those unknowns, Fortune’s calculations, after adjustment for leased cars, showed a clear trend. In the fourth quarter of 2018, Tesla budgeted an estimated $2,007 per car to pay for repairs for the duration of the cars’ warranties. By the fourth quarter of 2019, the allocation had declined almost 27%, to just $1,467 per car.

These changes in Tesla’s warranty accounting had a major impact on its reported profits. If the company had set aside the same amount per car delivered in the fourth quarter of 2019 as it did for the same period in 2018, its warranty funding would have cost an estimated $207 million, instead of the actual contribution of $151.3 million.

The implied savings of $56 million would have accounted for more than half of Tesla’s $105 million in total fourth-quarter net profit.

Many analysts and investors base their projections about Tesla’s future on the profit margin of each car it sells – its so-called ‘automotive gross margin,’ which includes warranty costs. A higher gross margin would make the carmaker appear to be a bigger money maker, thereby pushing investors to bid up its stock price.

Fund manager Mark Spiegel has approached the issue from a different direction, and says he found even larger discrepancies. Based on what Tesla said it actually spent to maintain cars under warranty in the third quarter of 2019, Spiegel estimated that the cost of maintaining a Tesla over its lifetime is $3,232 per car. Funding fourth-quarter 2019 warranty costs to that level would have cost $333 million, $182 million more than the actual declared cost – enough to more than wipe out Tesla’s fourth-quarter profits.

“It’s clear based on the revealed amount of warranty spend . . . that the reserve is too small,” Spiegel, a longtime, vocal Tesla short-seller, tells Fortune.

Craig Irwin, a senior analyst at Roth Capital Management, is also skeptical of Tesla’s accounting. Irwin lowered his rating on Tesla’s stock to a “sell” in late October, partly because he saw problems with the warranty accounting. Irwin describes the warranty accounting changes as seeming “somewhat artificial rather than organic” and “aggressive.”

Irwin’s skeptical downgrade, of course, has turned out to be at the very least ill-timed. Anyone who took his advice in October has missed the stock’s historic run from $327 to over $850, before pulling back to nearly $750 based on fears over the impact of coronavirus on sales and production. Either the details of accounting have been overwhelmed by optimistic market sentiment, or many others have looked at the criticisms and found them unconvincing.

Did the cars just get that much better?

And there are plausible, benign explanations for Tesla’s steadily-declining warranty commitments. Tesla had a notoriously rocky rollout for its Model 3 sedan in late 2017, including many of the cars being built using what CNBC described as “shortcuts,” or under improvised conditions including in a tent factory.

“I think it’s likely that they’ve gotten better at making the Model 3,” says Fossi, the blogger. “The later [cars] are probably more reliable.”

Such improvements may have lowered Tesla’s internal forecasts for lifetime warranty service costs for cars manufactured more recently. Even Spiegel’s own estimates of Tesla’s real repair costs have declined. For the third quarter of 2018, he calculated the expense at $3,500 per car, compared to $3,232 in the same period a year later. If Tesla’s warranty costs are truly declining, there’s less reason to question the company’s profitability.

By some measures, Tesla’s warranty funding is more than adequate. In fact, compared to some other automakers, it’s near average.

Business news publication Barron’s calculated that Tesla’s third quarter additions to the warranty reserve were 2.7% of the company’s car sales – slightly higher than the auto industry average of 2.5%. That’s despite the fact that electric engines have fewer parts that are subject to wear than internal combustion engines, making them potentially cheaper to maintain.

Future risks

The accuracy of Tesla’s warranty reserves may, one day, have a concrete impact on investors. Increasing warranty repair costs could deplete current reserves. If that happens, the company would have to sharply increase its warranty contributions, which would in turn reduce profits. Tesla includes a boilerplate statement about that risk in its regulatory filings, saying “Our current and future warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance.”

For the moment, what’s most notable about Tesla’s accounting is that for many investors, it simply doesn’t matter. “The growth story is what matters,” says Albert Meyer, founder of Bastiat Capital, which says its investing principles are “anchored in forensic accounting.” But when it comes to Tesla, and the warranty reserve specifically, Meyer throws up his hands.

“Maybe it should be $5 million more. Maybe it should be $10 million more,” he says. “But does that really matter? With Tesla, people just shrug it off.”