Tesla Solar Revenue vs Automotive

A Tesla battery from an electric car. Flickr Image.

Tesla generates the majority of its revenue from automotive. However, its energy business is booming and is poised for massive profitability.

Elon Musk has suggested that Tesla’s energy segment has the potential to eventually become as large, if not larger, than its automotive business.

The reason is straightforward: Tesla’s entire Supercharger network might eventually be powered by its own energy generation and storage systems.

Additionally, Tesla not only cross-sells its solar products to its automotive customers but also actively promotes a comprehensive renewable energy experience. Tesla encourages its automotive customers to charge their vehicles with solar energy, with its storage and energy generation systems playing a significant role in this vision.

Let’s look at Tesla’s energy and automotive sectors by analyzing their sales revenue, growth rates, and profitability.

You may find related statistic of Tesla on the following pages:

Sales

• Car sales and production by model,

Revenue

• Revenue segments and profit margin breakdown,
• Revenue by country: U.S., China, Norway, Netherlands, etc.,

Energy

• Energy sales and gross margin,
• Solar and energy storage deployments,

Profit Margin

• Gross profit breakdown: automotive, energy, and services,
• Profit margin by segment: automotive, energy, and services,
• Gross profit and gross margin per car,
• Profit per employee,

R&D Comparison

• Tesla vs BYD,
• Tesla vs GM,
• Tesla vs Ford,
• Tesla vs Chinese EV companies,

Debt, Cash, and Liquidity

• Financial health: debt level, payment due, and liquidity,
• Cash flow and cash on hand analysis,
• Debt to equity, capital structure, and more,

Comparison With Peers

• Marketing, advertising, and promotional spending,
• Tesla vs GM: profit margin comparison,
• Tesla vs Ford: vehicle profit and margin,
• Tesla vs BYD: profit margin comparison,

Other Statistics

• Interest expense and interest coverage ratio,
• Infrastructure expansion: supercharger stations, service fleets, and stores,
• Operating expenses breakdown analysis,
• Inventory breakdown analysis

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Definitions Of Ratio

To help readers understand the content better, the following terms and glossaries have been provided.

Energy To Total Revenue Ratio: Tesla’s energy revenue to total revenue ratio measures the proportion of the company’s total revenue that comes from its energy segment, which includes solar products and energy storage systems.

This ratio helps illustrate the significance of Tesla’s energy business relative to its overall revenue. For example, in fiscal year 2023, Tesla’s energy segment accounted for approximately 6.2% of its total revenue. This ratio has been growing, reflecting the increasing importance of Tesla’s energy business.

Automotive To Total Revenue Ratio: Tesla’s automotive revenue to total revenue ratio measures the proportion of the company’s total revenue that comes from its automotive segment, which includes the sales of electric vehicles and automotive regulatory credits.

This ratio helps illustrate the significance of Tesla’s automotive business relative to its overall revenue. For example, in fiscal year 2023, Tesla’s automotive revenue, with regulatory credits revenue included, accounted for approximately 85% of its total revenue. This ratio highlights the dominant role of Tesla’s automotive segment in its overall revenue generation.

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Can Tesla Energy Grow To Be As Big As The Automotive?

Tesla’s energy segment has shown impressive growth in recent years, and there’s potential for it to become as large as its automotive business.

In 2023, Tesla’s energy storage deployments increased significantly, and the segment’s revenue grew by over 50%. Elon Musk has predicted that the energy storage business will grow much faster than the car business.

However, the automotive segment still accounts for the majority of Tesla’s revenue. While the energy segment is growing rapidly, it will take time and continued investment to reach the same scale as the automotive business.

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Solar Vs Automotive In Revenue

Between the 2023 and 2025 fiscal periods, a distinct divergence emerged between the two primary revenue streams. In 2023, Automotive revenue reached a peak of $82.4 billion, significantly overshadowing the Energy sector’s $6.0 billion.

By 2024, Energy revenue rose to $10.0 billion while Automotive revenue contracted to $77.1 billion. This trend persisted into 2025, as Energy revenue climbed further to $12.8 billion and Automotive revenue saw an additional decline to $69.5 billion.

The ten-year trajectory from 2016 to 2025 illustrates a fundamental shift in the corporate revenue profile, marked by the consistent and rapid scaling of the Energy division against a maturing Automotive segment.

While Automotive revenue provided the primary momentum for growth through 2023, the subsequent decline in that sector, coupled with the exponential rise in Energy earnings, suggests a strategic transition toward energy storage and generation as critical pillars of the long-term portfolio.

This evolution reflects a successful diversification strategy and the increasing market penetration of sustainable energy solutions.

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Solar Vs Automotive In Revenue Growth

The historical performance of Tesla’s Revenue Growth between 2018 and 2025 illustrates a fundamental structural pivot in the organization’s growth engine.

In the initial periods, specifically 2018, the Automotive segment dominated with a 92.0% growth rate, significantly outpacing the 39.1% growth observed in Energy.

However, by the final two fiscal years, the roles have effectively reversed: Automotive growth turned negative, sliding to -9.8% in 2025, while the Energy segment remained a robust contributor with a 26.6% increase.

This contrast highlights a shift from an auto-centric expansion to a model where energy infrastructure sustains the top-line momentum.

Average Performance: 2023–2025

The observed data signifies the transition of Tesla from its “high-growth EV” phase into a more complex industrial profile. The Automotive segment’s shift into negative growth territory (−6.5% and −9.8%) reflects a combination of global market saturation, intensified competition from domestic Chinese manufacturers, and the erosion of first-mover advantages as mainstream automakers achieve scale.

In contrast, the Energy segment is entering a period of scaling maturation. The exceptional average growth of nearly 50% over the last three years is driven by the deployment of utility-scale storage systems (Megapacks) and the ramp-up of new production facilities like the Shanghai Megafactory.

This trend suggests a strategic hedge: while the passenger vehicle market faces cyclical and competitive headwinds, the energy division is capturing high-margin, long-cycle utility contracts, effectively becoming the primary driver of corporate scalability for the 2026–2030 horizon.

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Solar Vs Automotive In Gross Margin

Examination of the gross margin data from 2016 to 2025 reveals a significant long-term shift in the profitability profiles of the Automotive and Energy divisions.

While the Automotive segment maintained a relatively stable margin between 21.2% and 29.3% for much of the decade, it entered a period of steady decline starting in 2022, reaching 17.8% by 2025.

Conversely, the Energy segment transitioned from a low-margin and occasionally negative-margin business—hitting a floor of −4.6% in 2021—into a high-performance sector that surged to 29.8% by the end of the period.

This culminated in a definitive crossover in 2024, where Energy margins exceeded Automotive margins for the first time, establishing a 12 percentage point lead by the 2025 fiscal year.

Average Performance (2023–2025)

The historical data illustrates the maturation of the core Automotive business and the successful scaling of the Energy infrastructure segment.

The compression of Automotive margins, particularly after the 2021 peak of 29.3%, reflects a broader industry environment characterized by intensifying global competition and aggressive pricing strategies required to maintain market share.

In contrast, the Energy segment’s trajectory from a drag on earnings to the primary margin driver highlights a fundamental transformation.

The rapid improvement since 2022 is largely attributable to the massive scaling of grid-scale storage solutions, such as the Megapack, and the realization of significant manufacturing efficiencies at specialized facilities.

As the company transitions from a hardware-centric automotive manufacturer to a diversified energy and AI platform, the superior margin profile of the Energy division suggests it will increasingly underpin the enterprise’s bottom-line stability while the vehicle segment navigates a more commoditized and price-sensitive landscape.

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Solar Vs Automotive In Percentage To Total Revenue

The distribution of revenue share between 2016 and 2025 demonstrates a gradual but accelerating shift in the corporate portfolio composition.

In the initial period of 2016, the Automotive segment dominated the landscape with 90.7% of total revenue, while the Energy division represented a marginal 2.6%.

This dominance remained relatively stable through 2022, with the Automotive share consistently hovering between 84% and 88%.

However, the most recent fiscal years show a notable departure from this historical norm; the Automotive contribution contracted from 85.2% in 2023 to 73.3% by 2025, while the Energy segment simultaneously expanded its footprint from 6.2% to 13.5% over the same timeframe.

The ten-year trend illustrates a significant strategic pivot toward a more balanced business model.

While Tesla remains fundamentally an automotive-led organization, the recent surge in the Energy segment’s share — now achieving double-digit significance — indicates that energy storage and solar products are scaling faster than vehicle deliveries on a relative basis.

This transition suggests a maturing electric vehicle market facing intensified global competition, contrasted with the rapid industrial deployment of utility-scale storage solutions.

The narrowing gap between these two sectors underscores a successful diversification strategy, transforming the entity from a pure-play automaker into a broader energy infrastructure provider.

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Conclusion

In summary, while Tesla’s automotive segment remains dominant in terms of revenue and profitability, the energy segment has shown impressive growth and improvements in gross margin, suggesting a potential for future expansion.

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References and Credits

1. All financial figures presented in this article were obtained and referenced from Tesla’s annual reports published in the company’s investor relation page: Tesla Press Releases.

2. Flickr Images.

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