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Tesla Energy Revenue, Margins, Storage And Solar Deployed

Tesla battery. Source: Flickr Image.

Tesla, the innovative electric vehicle manufacturer, is a company that is also making strides in the energy sector. Tesla’s energy segment focuses on developing and selling energy storage systems and solar products designed to enhance the use of renewable energy sources.

The company’s mission is to accelerate the world’s transition to sustainable energy, and its energy segment is a key part of achieving this goal. Tesla offers a range of energy products, including the Powerwall, Powerpack, and Megapack, designed to store energy from solar panels or the grid and provide power when needed.

The company also offers solar panels and roofs, allowing homeowners to generate their own clean energy. With Tesla’s energy products, customers can reduce their reliance on fossil fuels, save money on energy costs, and contribute to a more sustainable future.

An example is that Tesla’s supercharger stations may one day be entirely powered by its own solar energy generation and storage systems.

That said, this article presents several statistics of Tesla’s energy segment, which include the energy segment revenue, gross margin, growth rates, and solar and storage deployment.

Let’s take a look!

Please use the table of contents to navigate this page.

Table Of Contents

Definitions And Overview

A2. Tesla Energy Business Strategy
A3. How Tesla Energy Makes Money

Energy Revenue

B1. Energy Revenue By Year
B2. Energy Revenue By Quarter
B3. Energy Revenue By TTM

Energy Revenue Growth Rates

B4. Energy Revenue YoY Growth Rates

Energy Profitability

C1. Energy Gross Margin By Year
C2. Energy Gross Margin By Quarter
C3. Energy Gross Margin By TTM

Solar Deployment

E1. Solar Deployment By Year
E2. Solar Deployment By Quarter
E3. Solar Deployment By TTM

Energy Storage Deployment

F1. Energy Storage Deployment By Year
F2. Energy Storage Deployment By Quarter
F3. Energy Storage Deployment By TTM

Ratio And Comparison

G1. Energy To Total Revenue Ratio
G2. Energy Vs Automotive Revenue

Conclusion And Reference

S1. Conclusion
S2. References and Credits
S3. Disclosure

Definitions

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

Enery Storage Deployment: Energy storage deployment refers to the process of installing and utilizing energy storage systems to store excess energy generated from renewable sources, such as solar or wind power, for later use.

These storage systems can provide power during peak demand when energy costs are higher or during power outages. Energy storage deployment is an important aspect of transitioning to a more sustainable and reliable energy system, as it allows for better integration of renewable energy sources and reduces reliance on fossil fuels.

Solar Deployment: Solar deployment refers to installing and utilizing solar energy systems, such as solar panels, to generate electricity from sunlight.

This involves the installation of solar panels on rooftops, fields, or other suitable surfaces to capture sunlight and convert it into usable energy. Solar deployment is an important aspect of transitioning to a more sustainable and renewable energy system, as it allows for the generation of clean energy while reducing reliance on fossil fuels.

Power Purchase Agreement: A power purchase agreement (PPA) is a legal contract between an electricity generator and a buyer, typically a utility or a corporation.

In this agreement, the generator agrees to sell a certain amount of electricity at a pre-determined price over a specified period. PPAs are commonly used in the renewable energy industry to facilitate the financing and development of new renewable energy projects.

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Megawatt (MW): A megawatt (MW) is a power unit equal to one million watts. It is commonly used to measure large power plants’ output power or industrial facilities’ power consumption.

One megawatt equals 1,000 kilowatts (kW) or 1,000,000 watts (W). The capacity for 1 megawatt (MW) of power depends on the type of power generation technology used. For example, a 1 MW wind turbine can generate enough electricity to power around 300 homes, while a 1 MW natural gas turbine can power around 1,000 homes.

Megawatt Hour (MWh): A megawatt-hour (MWh) is a unit of energy equivalent to one million watt-hours. It is commonly used to measure the amount of energy consumed or produced over a certain period by large power plants or industrial facilities.

For example, if a power plant generates 1 megawatt of power for one hour, it would produce 1 MWh of energy. The capacity of 1 megawatt-hour (MWh) of energy does not directly correspond to the number of homes it can power, as the amount of energy a home consumes can vary widely depending on factors such as the size of the home, the number of occupants, and the appliances and devices used.

However, as a rough estimate, one MWh of energy could potentially power around 400 to 900 homes for an hour, depending on the average energy consumption of those homes. It’s important to note that this is just an estimate, and the actual number of homes that 1 MWh of energy can power can vary widely depending on many factors.

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Tesla Energy Business Strategy

Tesla’s business strategy for the energy segment is based on revolutionizing how people consume and generate energy. The company aims to accelerate the world’s transition to sustainable energy by providing affordable and reliable renewable energy solutions.

Tesla’s energy division offers a range of products, including solar panels, energy storage systems, and electric vehicle charging stations, all designed to work seamlessly together to create a fully integrated energy ecosystem. By combining renewable energy generation with energy storage and efficient consumption, Tesla aims to reduce the world’s dependence on fossil fuels and help combat climate change.

In this way, Tesla’s business strategy for the energy segment is environmentally responsible and economically sustainable, as it seeks to create long-term value for the company and its customers.

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How Tesla Energy Makes Money

Tesla energy

Tesla energy

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Tesla’s energy gets its revenue primarily from two sources:

  • 1. Energy generation and storage sales
  • 2. Energy generation and storage leasing

Tesla’s energy generation and storage sales revenue is derived from sales of solar energy systems and energy storage products to residential, small commercial, and large commercial and utility grade customers.

On the other hand, Tesla’s energy generation and storage leasing revenue is derived from leasing solar energy systems and electricity to commercial and retail customers.

In the case of leasing, Tesla is the lessor who owns the assets, while its customers are the lessees.

Apart from leasing the entire solar energy generation systems, Tesla also leases electricity to retail and commercial customers under a power purchase agreement (PPA).

Tesla earns recurring income from customers leasing electricity under a power purchase arrangement.

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Energy Revenue By Year

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* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

Tesla earned US$6.0 billion, US$3.9 billion, and US$2.8 billion in energy revenue for the year ended on 31 Dec 2023, 2022, and 2021, respectively.

If a similar growth rate continues into 2024, Tesla will earn US$8.4 billion in energy revenue in fiscal 2024.

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Energy Revenue By Quarter

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* Tesla’s energy revenue by quarter comes from the company’s consolidated income statements.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

Over the last four quarters, Tesla’s energy revenue clocked US$1.4 billion, US$1.6, US$1.5 billion, and US$1.5 billion, respectively, the highest quarterly figures ever recorded in any period.

Tesla reported significant quarterly energy revenue growth in the last several quarters compared to all prior periods.

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Energy Revenue By TTM

tesla-energy-revenue-by-ttm

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* TTM plot consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

The TTM or trailing 12-month plot above smoothes out the quarterly curve and better reflects the trend of Tesla’s energy revenue.

That said, Tesla’s TTM energy revenue reached a record high of US$6.0 billion as of 4Q 2023, up 54% from a year ago.

The TTM plot indicates that Tesla’s energy revenue has significantly increased in recent quarters.

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Energy Revenue YoY Growth Rates

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* YoY growth rates are calculated using the TTM data.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

As of fiscal 4Q 2023, Tesla’s energy revenue grew by a massive 54% year-over-year, up significantly over a year ago.

Overall, Tesla has reported significant energy revenue growth exceeding 40% over the last several quarters.

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Energy Gross Margin By Year

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* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

Tesla’s energy does not seem to have a high gross margin, indicating the low profitability of the energy segment. However, Tesla’s energy gross margin has significantly recovered since fiscal 2021, reaching a record figure of 18.9% as of 2023.

Before making a profit, Tesla’s energy mostly had negative gross margins, illustrating the unprofitable nature of the company’s energy business.

Tesla’s low gross margin in the energy segment is due to the high costs of production/installation.

One notable example is the solar roof, for which Tesla needs to painstakingly train its staff for installation to prevent years of leaks as well as damages down the road.

In contrast, Tesla’s automotive segments, such as car sales and leasing sales, generate a much higher gross margin of between 20% and 40%.

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Energy Gross Margin By Quarter

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* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

Tesla’s energy gross margin appears to have significantly recovered in the last several quarters. As of 4Q 2023, Tesla managed to record a gross margin of 21.8% in the energy segment, up considerably from 12.1% a year ago.

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Energy Gross Margin By TTM

tesla-energy-gross-margin-by-ttm

tesla-energy-gross-margin-by-ttm

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* TTM plot consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

The TTM plot above clearly depicts the gross margin recovery of Tesla’s energy segment in recent quarters.

As of 4Q 2023, Tesla’s TTM gross margin topped 18.9%, a record high since fiscal 2021. The latest figure represents a massive turnaround from two years ago and is more than double the figure from a year ago.

In short, Tesla’s years of investment in the energy sector are paying off now as the profitability of the energy business is on the rise.

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Solar Deployment By Year

tesla-solar-deployment-by-year

tesla-solar-deployment-by-year

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* One megawatt is equivalent to the energy produced by ten automobile engines or the electricity consumed by 10,000 100-watt light bulbs at any moment when they are turned on.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

A definition of solar deployment can be found here: solar deployment. Tesla’s solar deployment of 223MW in fiscal 2023 was down significantly from a year ago.

Tesla highlighted that the decrease in solar deployment is primarily due to the high-interest rate environment that has caused an industry-wide postponement of solar purchases.

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Solar Deployment By Quarter

tesla-solar-deployment-by-quarter

tesla-solar-deployment-by-quarter

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* One megawatt is equivalent to the energy produced by ten automobile engines or the electricity consumed by 10,000 100-watt light bulbs at any moment when they are turned on.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

A definition of solar deployment can be found here: solar deployment.

Tesla’s quarterly solar deployment is spiraling downward. As of 4Q 2023, Tesla deployed only 41MW of solar energy, a record low since 2022 and down more than 50% from a year ago.

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Solar Deployment By TTM

tesla-solar-deployment-by-ttm

tesla-solar-deployment-by-ttm

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* TTM plot consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* One megawatt is equivalent to the energy produced by ten automobile engines or the electricity consumed by 10,000 100-watt light bulbs at any moment when they are turned on.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

A definition of solar deployment can be found here: solar deployment.

The TTM plot above shows that Tesla’s solar deployment is spiraling downward post-2023.

As of fiscal 4Q 2023, Tesla’s TTM solar deployment totaled 223MW, down 36% over a year ago.

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Energy Storage Deployment By Year

tesla-energy-storage-deployment-by-year

tesla-energy-storage-deployment-by-year

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* One megawatt-hour is equivalent to the amount of electricity used by about 330 homes during one hour or the energy consumed by 10,000 100-watt light bulbs for one hour.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

A definition of energy storage deployment can be found here: energy storage deployment. Unlike the solar deployment, Tesla’s energy storage deployment has never slipped a bit, even during the height of the COVID-19 crisis in fiscal 2020.

Since fiscal 2018, Tesla’s storage deployment has grown by more than 500% and reached a record high of 14.7GWh as of fiscal 2023, an increase of 126% year on year.

Tesla’s record energy storage deployment is a result of the ongoing ramp of the Megapack factory (Megafactory) in Lathrop, CA.

It looks like Tesla is hitting the right spot in the energy storage business.

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Energy Storage Deployment By Quarter

tesla-energy-storage-deployment-by-quarter

tesla-energy-storage-deployment-by-quarter

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* One megawatt-hour is equivalent to the amount of electricity used by about 330 homes during one hour or the energy consumed by 10,000 100-watt light bulbs for one hour.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

A definition of energy storage deployment can be found here: energy storage deployment. Tesla’s quarterly energy storage deployment grew 30% in fiscal 4Q 2023 from a year ago to reach 3.2GWh.

However, the figure was slightly lower sequentially.

As shown in the plot above, Tesla’s energy storage deployment has significantly soared since fiscal year 2022, and the uptrend seems to continue towards fiscal year 2023.

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Energy Storage Deployment By TTM

tesla-energy-storage-deployment-by-ttm

tesla-energy-storage-deployment-by-ttm

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* TTM plot consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* One megawatt-hour is equivalent to the amount of electricity used by about 330 homes during one hour or the energy consumed by 10,000 100-watt light bulbs for one hour.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

A definition of energy storage deployment can be found here: energy storage deployment. The TTM plot depicts the significant rise in Tesla’s energy storage deployment since fiscal 2022.

On a TTM basis, Tesla’s energy storage deployment hit 14.7GWh as of 4Q 2023, a new high since 2018.

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Energy To Total Revenue Ratio

tesla-energy-revenue-to-total-revenue-ratio

tesla-energy-revenue-to-total-revenue-ratio

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* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

As shown in the chart above, Tesla’s solar business used to contribute more than 10% of sales to total revenue.

Since fiscal 2018, this ratio has dropped drastically. In recent quarters, the energy to total revenue ratio has steadily risen and exceeded 6% as of 4Q 2023.

The rising energy ratio to total revenue illustrates the growing significance of Tesla’s energy and the improving business prospects in the energy business segment.

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Energy Vs Automotive Revenue

tesla-energy-vs-automotive-revenue

tesla-energy-vs-automotive-revenue

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* Tesla’s automotive revenue includes regulatory credits but excludes services.
* TTM data are plotted in the chart above.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

To get an idea of how much Tesla’s energy business has progressed with respect to automotive revenue, the chart above shows the revenue comparison between the energy and automotive segments on a TTM basis.

That said, the chart above depicts a huge contrast between Tesla’s energy and automotive revenue, and the gap is growing.

As of fiscal 4Q 2023, the gap between Tesla’s automotive and energy segments has reached 14X, some of the most significant differences ever measured.

In the latest quarter, Tesla’s automotive revenue totaled $82.4 billion versus $6.0 billion in energy revenue.

The gap between Tesla’s automotive and energy sales was much smaller in earlier years compared to recent results, illustrating the much faster growth of the automotive segment over the solar business.

However, Tesla’s energy may soon close the gap, considering that its growth is starting to gain traction.

Elon Musk believes the energy business may ultimately be as huge as, if not bigger than, the automotive business someday when the adoption of renewable energy accelerates.

Therefore, will we see explosive growth in the energy segment, similar to the automotive sector?

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Conclusion

Based on recent results, we are starting to see some traction in Tesla’s energy.

Tesla’s energy is starting to make money, as reflected in the rising margins and improving profitability.

While Tesla’s energy is gaining ground, especially in the energy storage segment, there is still much work for Tesla.

I believe Tesla’s energy is on the right track.

What do you think?

Please leave your comment below.

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References and Credits

1. All financial figures presented in this article were obtained and referenced from Tesla’s financial statements, SEC filings, earnings releases, shareholders letter, annual reports, etc., which are available in Tesla Update Letters and Presentations.

2. Featured images were used under Creative Common License and obtained from Dave Dugdale and Nick Ares.

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Disclosure

References and examples such as tables, charts, and diagrams are constantly reviewed to avoid errors, but we cannot warrant the total correctness of all content.

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

If you find the information in this article helpful, please consider sharing it on social media and providing a link to this article from any website so that more articles like this can be created in the future.

Thank you!

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