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Tesla Revenue Breakdown And Projected Growth In 2022

Tesla Model S at a car show. Source: Flickr

Tesla (NASDAQ:TSLA) is an American electric vehicle or EV company with operations scattered all around the world.

The company has been growing at a breakneck speed after debuting from its IPO in June 2010.

As of late, Tesla has been building the world’s largest Gigafactories in several locations globally and the constructions of these mega factories are all progressing in parallel.

This is how the world’s largest EV maker going to conquer the world with its renewable energy ambition and tackle the world’s climate crisis.

Tesla is aiming to become the world’s first technology company that builds not only cars but also the world’s most advanced autonomous vehicles.

As of Feb 2022, Tesla is worth nearly $1 trillion USD in market capitalization.

By 2030, Tesla will most likely be worth $3 trillion USD or maybe more given the trajectory of its growth and the world’s ambition of switching to zero-emission automobiles.

However, the biggest driver of Tesla’s growth in the future will reportedly come from a subscription-based business model which will include clean energy leasing, software subscription and battery-as-fuel subscription for its users base.

Can Tesla pull it off? Absolutely!

In this article, we will look at several of Tesla’s numbers, including the revenue figures, sales breakdown by segment and by region, gross margins, profitability, and growth rates.

Other than the historical numbers, we also will dive into Tesla’s projected revenue growth for fiscal 2022 and 2023 and what Tesla’s revenue will be like 3 years from now.

Let’s start with the topics below.

What Makes Up Tesla’s Revenue

Let’s first take a look at the breakdown of Tesla’s sales.

The following snapshot shows Tesla’s revenue breakdown extracted from the company’s consolidated income statements.

Tesla revenue breakdown for FY2021

Tesla revenue breakdown for FY2021

Based on the snapshot above, Tesla’s revenue is made up of the following segments as of fiscal 2021:

In short, Tesla’s sales come from several revenue segments, including automotive sales and leasing, services, and the energy sector.

In the following discussion, we will look at how each of Tesla’s revenue segments has performed over the years and will perform in the future.

Let’s read on!

Tesla’s Total Revenue (Yearly)

Tesla total revenue by year

Tesla total revenue by year

* Annual revenue is a GAAP measure and is obtained from Tesla’s consolidated income statements.
* Projected revenues for fiscal 2022 and 2023 came from the author’s own calculation.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

On a yearly basis, Tesla’s total revenue soared to a record high as of fiscal 2021 at nearly $54 billion USD.

Tesla made only $4 billion in annual sales 6 years ago.

Between fiscal 2015 and 2021, Tesla’s sales have grown at a compounded annual growth rate or CAGR of more than 50%.

By fiscal 2022, Tesla’s total revenue is projected to reach $72 billion USD based on the guided vehicle deliveries of approximately 1.3 units, a 40% growth from fiscal 2021.

Also, Tesla’s vehicle sale price is averaged at around $49,000 per car according to this article – Tesla’s vehicle average sale price (ASP).

With the estimated ASP and projected sales of 1.8 million vehicles as well as a growth rate of around 30% for the energy sector, Tesla’s total revenue in fiscal 2023 is estimated to come in at $100 billion, nearly double that of 2021.

In short, Tesla’s sales growth has been extraordinary and will be even more massive going into the future when the world accelerates the transition of fossil-fueled to emission-free automobiles.

Tesla’s Revenue Vs GM And Ford

Tesla total revenue comparison with GM and Ford

Tesla total revenue comparison with GM and Ford

* Tesla, GM and Ford’s revenue are GAAP measures and are obtained from their respective consolidated income statements.
* Tesla’s projected revenues for fiscal 2022 and 2023 come from the author’s own calculation.
* All companies’ fiscal year begins on Jan 1 and ends on Dec 31.

While Tesla’s revenue has reached record highs over the years, it was still far behind that of its peers, including General Motors and Ford Motors according to the chart above.

As seen, Tesla’s total sales in fiscal 2021 were less than half of what GM and Ford each made in the same fiscal year.

Looking at the historical figures, both GM and Ford had successfully raked in up to $160 billion in annual sales in the past.

From a comparison perspective, Tesla’s 2021 revenue of $54 billion was still way behind that of GM and Ford.

Therefore, Tesla has a long way to go before it will achieve the same level of sales as that of GM and Ford.

Even by fiscal 2023, Tesla’s estimated $100 billion of sales will only be about 3 quarters of what GM and Ford will make in the same fiscal year.

In short, Tesla’s growth may have only just started and there are still plenty of opportunities ahead for the company as well as for investors to get in the stock now.

Tesla’s Revenue Breakdown By Absolute Value

Tesla total revenue breakdown by value

Tesla total revenue breakdown by value

* Annual revenue by segment is a GAAP measure and is obtained from Tesla’s consolidated income statements.
* Tesla’s projected revenue breakdown for fiscal 2022 and 2023 comes from the author’s own calculation.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

Tesla’s biggest revenue stream comes from the automotive segment as seen in the chart above.

In fiscal 2021, Tesla made $47 billion of automotive revenue or about 88% of total sales.

Going forward, Tesla’s automotive revenue is estimated to come in at $64 billion and $89 billion for fiscal 2022 and 2023, respectively.

On the other hand, Tesla’s services and energy revenues were a lot smaller, at only $3.8 billion and $2.8 billion respectively in fiscal 2021.

At a 30% growth rate, Tesla’s energy is expected to reach $3.6 billion by fiscal 2022 and $4.7 billion by 2023.

The growth drivers in the energy sector will most likely come from Tesla’s solar roof and energy storage in which a mass-market adoption may be feasible by that time.

Apart from the energy revenue, Tesla’s services revenue also has been on a tear and had managed to slightly pull ahead in fiscal 2021.

Also, given a 30% growth rate, Tesla’s services revenue is estimated to reach $4.9 billion and $6.4 billion respectively in fiscal 2022 and 2023, well ahead of the energy segment revenue.

Tesla’s Total Revenue Breakdown By Percentage

Tesla total revenue breakdown by percentage

Tesla total revenue breakdown by percentage

* Total revenue breakdown by percentage is calculated by the author and is based on Tesla’s automotive revenue, energy revenue and services revenue obtained from the company’s consolidated income statements.
* Tesla’s projected revenue breakdown for fiscal 2022 and 2023 comes from the author’s own calculation.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

On a percentage basis, Tesla’s automotive revenue makes up nearly 90% of the company’s total sales.

For example, Tesla’s automotive revenue constituted 87.8% of total sales in fiscal 2021, about 1 ppts higher than that of the prior year.

Going into the future, Tesla’s automotive revenue contribution is projected to grow slightly to 88% in fiscal 2022 and 89% in fiscal 2023 based on the estimated figures.

At the same time, Tesla’s energy sector percentage came in at only 5.2% in fiscal 2021 and is estimated to decline to 5% by fiscal 2022 and 4.7% by fiscal 2023.

On the flipped side, Tesla’s service sector contributed a much higher percentage at 7.1% in fiscal 2021.

Similar to the energy segment, Tesla’s service revenue share also is expected to decline in subsequent years and will probably clock lower at 6.8% in fiscal 2022 and 6.4% in fiscal 2023.

Tesla’s Revenue Annual Growth Rates

Tesla total revenue annual growth rates

Tesla total revenue annual growth rates

* Annual revenue growth rates are calculated by the author and is based on Tesla’s total revenue, automotive revenue, energy revenue and services revenue obtained from the company’s consolidated income statements.
* Projected growth rates for fiscal 2022 and 2023 is based on the author’s own calculation.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

In terms of growth rates, Tesla’s total revenue grew 71% in fiscal 2021 from the prior year.

Similarly, Tesla’s automotive and services revenues grew at nearly the same rate at 70% in fiscal 2021.

While the energy revenue accounts for only 5% of total sales, Tesla’s energy growth rate still came in at 40% in fiscal 2021, a quite impressive figure.

Going into fiscal 2022, Tesla’s total revenue is estimated to grow 34% from 2021 and 39% in fiscal 2023 year-over-year.

These growth rates are calculated based on the historical ASP which we discussed earlier and the guided 40% growth rate for Tesla’s vehicle deliveries.

Tesla’s Quarterly Revenue

Tesla quarterly total revenue

Tesla quarterly total revenue

* Quarterly total revenue is a GAAP measure and is obtained from Tesla’s consolidated income statements.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

On a quarterly basis, Tesla made nearly $18 billion in fiscal 4Q 2021 alone, a new record for the company in the last 6 years.

While Tesla’s quarterly sales have been increasing on a long-term basis, the journey has not been a smooth sail.

For instance, Tesla’s quarterly sales declined by 40% in 1Q 2019 compared to the prior quarter but were still up 12.5% year over year.

Overall, Tesla’s quarterly revenue has been on a rise since fiscal 2015, an important trend for a growing company.

You may see some ups and downs in the plot, but on a long-term basis, we are seeing a rising trend and this is what counts the most.

Tesla’s TTM Revenue

Tesla TTM total revenue

Tesla TTM total revenue

* The plot above is presented on a TTM basis which 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.

To smooth out the quarterly plot, I created the trailing 12-month (TTM) revenue plot which is shown in the chart above.

The TTM plot is best used to see the trend of Tesla’s revenue on a long-term basis.

As seen in the chart, Tesla’s revenue rose to a record high of $54 billion as of fiscal Q4 2021, an increase of more than 70% year on year.

Between fiscal 2015 and 2021, Tesla’s revenue growth has been driven primarily by automotive sales which consist mainly of Model 3 deliveries in the early years and Model 3 and Y deliveries in fiscal 2021.

While automotive sales have been Tesla’s main growth driver, other sectors such as energy and services also have partly contributed to the growth.

All in all, Tesla emerges stronger year on year as seen from the rising TTM revenue.

Tesla’s Quarterly Gross Margin

Tesla quarterly gross margin

Tesla quarterly gross margin

* Quarterly gross margin is a GAAP measure and is calculated by the author based on Tesla’s quarterly revenue and gross income obtained from the company’s consolidated income statements.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

The gross margin is an important metric that measures the gross profitability of a company.

Tesla’s gross margin shown in the chart above is measured on a consolidated basis and accounts for only costs of sales while leaving out other expenses such as research and development and SGA.

According to the chart above, Tesla’s gross margin has trended lower between 2015 and 2019 and reached the bottom at about 12.4% in 1Q19.

However, the downtrend reversed in 2019 and the gross margin is seen ticking higher since 2019.

From fiscal 1Q 2019 onward, Tesla’s quarterly gross margin was seen rising and reached 27.4% as of Q4 2021, a new high since fiscal 2019.

Tesla’s expanding gross margin between fiscal 2019 and 2021 has been a result of strong Model 3/Y production and deliveries, and the continuous cost reduction due primarily to volume expansion as the company gets more efficient operationally.

According to Tesla’s 1Q 2021 earnings release, Tesla’s average costs per car for all models totaled $84,000 in 2017.

However, Tesla managed to bring the average cost per vehicle to only $38,000 in Q1 2021 by continuously launching new products and building more factories.

Also, Tesla’s vehicle margin clocked in at more than 20% in fiscal 2021 according to this article: Tesla’s Vehicle Margin Vs Nio, Xpeng And Li Auto, beating all Chinese EV makers.

As shown, Tesla’s vehicle margin is the highest among all Chinese EV companies.

Tesla’s TTM Gross Margin

Tesla TTM gross margin

Tesla TTM gross margin

* The plot above is presented on a TTM basis which 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.

As mentioned, the TTM curve is used to smooth out the bumps in the quarterly plot and to better observe the long-term trend of Tesla’s gross margin.

From a TTM standpoint, Tesla’s gross margin is seen improving since fiscal 2018 and continued to move higher to the 20% level as of fiscal 2021.

As of fiscal 2021 Q4, Tesla’s TTM gross margin ticked higher to 25.3%, a record high in the last 6 years.

Tesla’s gross margin is expected to further improve for the rest of 2021 and into 2022 as a result of production volume expansion and continuous cost reduction.

As mentioned, Tesla is getting more efficient from an operational perspective and is increasingly having synergies across all manufacturing platforms.

In return, the synergies will drive margin expansion.

Going forward, Tesla is projected to produce and deliver approximately 1.3 million vehicles by the end of fiscal 2022 and 1.8 million vehicles by fiscal 2023, a 40% growth on average with respect to fiscal 2021.

In short, Tesla will see further margin expansion when it cracks the 1.3 million delivery target by the end of fiscal 2022.

Tesla’s Revenue By Segment (With Automotive Sales)

Tesla revenue by segment with automotive sales

Tesla revenue by segment with automotive sales

* Quarterly revenue by segment is a GAAP measure and is obtained from Tesla’s consolidated income statements.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

Tesla’s quarterly revenue breakdown shows that the company’s automotive sales have been the primary revenue stream since 2015.

In fiscal Q4 2021, Tesla’s automotive sales revenue alone contributed $15 billion in sales to the company, achieving a ratio in excess of 80%.

The lion’s share of the automotive sales revenue tends to make other business segments look insignificant in terms of revenue contribution.

As of fiscal 2021 Q4, none of Tesla’s other business segments has yet to cross the $1 billion revenue mark except for the services sector.

However, Tesla’s services revenue was getting close at about $900 million in sales in fiscal 3Q 2021 and managed to reach $1.1 billion in fiscal 4Q 2021.

This scenario shows how critical the automotive product or the Model 3 and perhaps the Model Y, is to Tesla.

Tesla has been dangerously walking on a fine line by counting on only a single product for growth since 2017.

If the Model 3 had failed miserably, Tesla would have gone out of business.

There is just too much risk for Tesla to rely wholely on a single product or two for its survival all this while.

Fortunately, Tesla has already started to diversify its products by introducing the Model Y, which the company has already started producing and delivering since 2Q 2020 at the Fremont Gigafactory.

For your information, Tesla has also started producing Model Y at the Shanghai Gigafactory in late 2020 and has already started to ship Model Y for the Chinese market in early 2021.

Tesla Revenue By Segment (Without Automotive Sales)

Tesla revenue by segment without automotive sales

Tesla revenue by segment without automotive sales

* Quarterly revenue by segment is a GAAP measure and is obtained from Tesla’s consolidated income statements.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

The chart above shows Tesla’s revenue breakdown by segments but without automotive sales revenue.

As seen from the chart, it shows only Tesla’s quarterly revenue from the energy sector, automotive leasing and services.

Accordingly, Tesla’s “services and other revenue” has been increasing and overtaking that of the automotive leasing and energy segments to become the largest revenue contributor since fiscal Q4 2018.

In subsequent quarters, Tesla’s services segment continued to lead the race and reached $1.1 billion USD on a quarterly basis in fiscal 2021 Q4.

During the same period, Tesla’s energy sector has been fast catching up in terms of revenue growth and at one point even overtook that of the services sector.

However, Tesla’s energy sales dived considerably in 1Q 2021 on a sequential basis but made a comeback in fiscal 4Q 2021 at nearly $700 million of sales.

While Tesla’s automotive leasing revenue has been on a rise in the last few quarters, it only managed to reach $628 million on a quarterly basis in fiscal 4Q 2021, the lowest among all business segments.

As mentioned, Tesla’s solar sector has vast potential and may become the company’s dominant growth driver in the future.

As of fiscal 4Q 2021, Tesla’s energy revenue reached $688 million, down considerably from a year ago and also sequentially.

While Tesla’s energy revenue was down significantly, it still managed to deploy nearly 1GWh of storage in fiscal Q4 2021 alone.

Similarly, Tesla’s solar deployment also was quite impressive at about 85MW in 4Q 2021, a 1% decline from the same quarter a year ago.

Tesla’s services revenue growth continued to outpace most of the business sectors, growing nearly 60% year on year in fiscal Q4 2021, indicating that its importance cannot be underestimated.

For one thing, the “Services and Other” segment may inherently reflect the growth of its new car deliveries.

Understandably, when Tesla delivered more vehicles, the company has to follow through with the services and maintenance of these vehicles, resulting in the sales growth of the services business segment.

Tesla’s Revenue By Region

Tesla revenue by region

Tesla revenue by region

* Quarterly revenue by region is a GAAP measure and is obtained from Tesla’s consolidated income statements.
* Tesla’s fiscal year begins on Jan 1 and ends on Dec 31.

The chart above shows Tesla’s revenue breakdown by region into the United States, China, Norway and Netherlands.

Starting in 2020, Tesla has done away with the revenue breakdown for Norway and the Netherlands.

Instead, it has lumped these regions into “Other” in the revenue breakdown as shown in the chart above.

As the chart shows, sales from the United States contributed the most revenue to Tesla all these years, indicating that the U.S. has been by far the largest market for Tesla from fiscal 2015 to 2021.

In fiscal 2021 Q4, Tesla’s sales from the United States alone reached nearly $8 billion, representing a YoY growth of 54%.

This figure is inclusive of Tesla’s automotive and energy segment revenues as well as other revenue sources in the United States.

Both Netherlands and Norway as well as the rest of the world contributed the 2nd largest revenue stream to Tesla in 4Q 2021 at $5 billion.

This figure falls under the “Other” category as shown in the chart above and is inclusive of international sales from other countries not mentioned here.

China ranks 3rd spot at $4.8 billion of sales in fiscal 2021 4Q.

Year over year, Tesla grew its revenue in China by 84% in the 4th quarter of 2021.

Of all the regions, Tesla’s sales from the United States and China grew the fastest, with China being the best performer with YoY sales growth averaging 126% for the last 4 quarters.

The rising revenue in both the U.S. and China throughout fiscal 2021 indicates a strong demand for Tesla’s products, even during a post-pandemic period.

Internationally, Tesla’s sales started to pick up again in fiscal 2021 when it reported $5 billion of sales which includes the European and other regions of the world.

Year over year, Tesla grew its international revenue by 66% in Q4 2021.

In short, Tesla reported the strongest sales growth in China in 2020 and 2021, with sales doubling on a year-on-year basis.

Tesla’s Revenue Sequential Growth Rates

Tesla QoQ growth rates

Tesla QoQ growth rates

* Sequential growth rates are calculated by the author based on Tesla’s quarterly total revenue obtained from the company’s consolidated income statements.

While most quarters in the chart show positive quarterly growth rates, there is still a handful of them with minor negative growth rates and most are in the low single digits except for 1Q 2019 quarter when revenue plunged by a large percentage at -37%.

The reason for the large drop in sequential growth rate was primarily due to the pull-forward sales of electric vehicles to 1Q19 from 4Q18 which was caused by the reduction in government subsidies (mostly California and Federal level) starting 2019.

Although government subsidies, largely in California, has been cut starting in 2019 and Federal Tax credits had been totally phased out, demand for Tesla electric vehicles has still been going strong as seen from the impressive double-digit quarterly growth rates in 2Q19 and 4Q19 at 40% and 17% respectively.

As of fiscal Q4 2021, Tesla’s total revenue increased by a massive 29% sequentially, one of the strongest quarters the company has ever reported.

Tesla’s Total Revenue Year Over Year Growth Rates

Tesla YoY growth rates

Tesla YoY growth rates

* Year-over-year growth rates are calculated by the author based on Tesla’s quarterly total revenue obtained from the company’s consolidated income statements.

Similarly, the chart above shows the year-over-year growth rate of Tesla’s total revenue for the past 6 years from fiscal 2015 to 2021.

The results of the current chart are even more impressive considering that most quarterly results are positive and some of them are having triple-digit growth rates.

Year over year, Tesla’s quarterly sales grew at an impressive growth rate of 65% in fiscal 2021 4Q, driven primarily by strong vehicle delivery volumes and partly by other business segments, including energy and services.

Conclusion

To recap, Tesla is not just an automotive player but a software maker as well as an energy specialist.

Therefore, Tesla has vast growth potential.

In fact, Tesla’s growth story may have only just begun and there are so many areas that the company has not even touched on yet, including a subscription-based business model that will detail a swappable battery, charging infrastructure leasing, autonomous software leasing, etc.

Mind you, these areas cover only the automotive segment.

We have yet to touch on the energy sector.

I foresee that Tesla’s energy sector will take off significantly in the near future when the world accelerates the transition from fossil fuel to clean energy.

In short, Tesla’s growth story will get even better in the future.

References and Credits

1. All financial figures in this article were obtained and referenced from Tesla’s quarterly and annual filings which are available in Tesla Investor Relationship.

2. Projected revenues for FY2022 and FY2023 are based on this article: Tesla’s Projected Sales And Growth Rates.

3. Featured images in this article are used under creative commons license and sourced from the following websites: Paulius Malinovskis and CODE_n.

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Disclosure

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 also provide a link back to this article from any website so that more articles like this one can be created in the future. Thank you!

{ 1 comment… add one }
  • Michael Edenedo November 25, 2020, 10:22 pm

    As Tesla continues to grow, and SpaceX successes become real, will it be merged into the company?

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