Tesla Revenue Breakdown, Profitability And Margin By Segment

Tesla Model S at a car show. Source: Flickr

Tesla (NASDAQ:TSLA) is an automotive company that designs and produces electric cars (EVs) from the ground up.

Apart from EVs, Tesla also makes battery and energy storage products.

In addition, you may be surprised to hear that Tesla also builds power stations that produce electricity for residential as well as commercial purposes.

Of course, these power stations generate electricity by renewable means.

That said, the company has been growing at a breakneck speed after debuting from its IPO in June 2010.

To support the world’s growing demand for EVs and energy storage products, Tesla builds the world’s biggest Gigafactories in several locations on a global basis.

Far from being just an automotive maker, Tesla also develops its own autonomous driving software and it usually comes with the purchase of the vehicles.

Therefore, Tesla is both an automobile and software company.

In this article, we will look at the company’s sales revenue, profitability, and margins.

Tesla’s revenue is examined from different perspectives, which usually go by segment and by region or country.

Without further wait, let’s start with the topics below.

Total Revenue By Year

Tesla total revenue by year

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On a consolidated basis, Tesla’s total revenue soared to a record high of $81 billion USD as of fiscal 2022, up 51% over fiscal 2021.

For perspective, Tesla made only $4 billion in annual sales 7 years ago.

Since 2015, Tesla’s sales have grown at a compounded annual growth rate (CAGR) of more than 50%.

By fiscal 2023, Tesla’s total revenue is projected to reach $118 billion USD based on the guided vehicle deliveries of approximately 2 million units, a 50% growth from fiscal 2022.

This projected figure is based on the average vehicle selling price of approximately $52,000 per car according to this article – vehicle average sale price (ASP)

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 from fossil-fueled to emission-free automobiles.

Mind you, Tesla’s vehicle sales also will be catapulted when autonomous driving becomes mainstream.

Total Revenue By Quarter

Tesla quarterly total revenue

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On a quarterly basis, Tesla made $25 billion in fiscal 2Q 2023 alone, up slightly from the prior quarter and a massive 47% from a year ago.

This figure also is a record high between 2015 and 2023.

A note worth saying is that you may be seeing some ups and downs in Tesla’s revenue plot, but on a long-term basis, we are seeing a rising trend and this is what counts the most.

Total Revenue By TTM

Tesla total revenue by ttm

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To smooth out the quarterly plot, I created the trailing 12-month (TTM) revenue plot above to present a more refined version of Tesla’s revenue growth.

As seen in the chart, the rising trend of Tesla’s revenue looks even more profound when seen from the perspective of the TTM plot.

As of 2Q 2023, Tesla’s total revenue reached $94 billion on a TTM basis, up 9% sequentially and a massive 40% year-over-year.

Gross Margin By Quarter

Tesla quarterly gross margin

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Tesla’s gross margin, a GAAP measure, fluctuates quite dramatically.

After topping 29% in fiscal 1Q 2022, Tesla’s gross margin seems to have been on the decline.

As of 2Q 2023, Tesla’s gross margin clocked only 18.2%, a level that was last seen in 2020.

Gross Margin By TTM

Tesla TTM gross margin

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As mentioned, the TTM plot is a more refined version of the quarterly plot and it better presents the trend of Tesla’s gross margin.

Similarly, Tesla’s TTM gross margin peaked at 27% in fiscal 1Q 2022 and has since been on the decline.

As of fiscal 2023 Q2, Tesla’s TTM gross margin clocked 21.5%, a level that was last recorded in fiscal 2020.

Total Revenue Vs GM And Ford

Tesla total revenue comparison with GM and Ford

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While Tesla’s revenue has grown exponentially over the years, it is still behind that of its peers, including those from General Motors and Ford Motors according to the chart above.

However, Tesla is fast catching up.

If the projected figure becomes a reality in fiscal 2023, Tesla’s revenue lags only slightly behind.

At the current growth rates, Tesla will soon surpass GM and Ford’s figures in no time.

Automotive And Energy Revenue

tesla-automotive-and-energy-revenue

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Tesla has only 2 reportable segments, namely automotive and energy.

Tesla’s services segment is actually part of the automotive sector and I broke it down here to show readers the significant growth of the services segment.

That said, Tesla’s automotive revenue is much higher compared to the energy revenue even without including that of the services segment.

Also, the growth of Tesla’s revenue comes predominantly from the automotive sector.

In just 7 years, Tesla’s automotive revenue (excluding the services revenue) has multiplied by 18X, a far higher growth rate than that of the energy segment.

In fiscal 2022, Tesla’s automotive revenue was 18X bigger than the energy segment.

Even the services revenue alone was nearly twice the energy revenue figure.

Automotive And Energy Revenue In Percentage

tesla-automotive-and-energy-revenue-in-percentage

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On a percentage basis, Tesla’s automotive revenue alone (excluding service segment), accounted for nearly 90% of the company’s total sales.

This ratio has been pretty consistent in the past several years, illustrating that there has not been much breakthrough in other sectors.

In fact, the percentage of Tesla’s energy sales has even declined slightly over the past several years and reached a record low of 5% as of fiscal 2022.

Moreover, Tesla’s service revenue contributed to about 7% of the company’s total revenue, which was slightly higher than the energy sector.

Automotive And Energy Revenue Growth Rates

tesla-automotive-and-energy-revenue-growth-rates

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In terms of growth rates, we can see that Tesla’s automotive segment performs much better than the energy segment.

Between fiscal 2018 and 2022, Tesla’s automotive revenue growth rate averaged 52% compared to only 30% for the energy sector while the services segment clocked 46% in the periods.

Also worth mentioning is that Tesla’s automotive segment has never encountered a negative growth rate since 2018 and the sector even registered positive growth during the COVID-19 crisis.

Automotive And Energy Gross Profit

tesla-automotive-and-energy-gross-profit

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From a profitability perspective, Tesla’s automotive segment contributed the largest profit to the company.

In this aspect, Tesla’s automotive segment generated a gross profit of more than $20 billion in fiscal 2022, the largest figure that has ever been recorded.

On the other hand, Tesla’s energy sector contributed only $288 million of gross profit in fiscal 2022.

The profitability of the energy sector has not been very consistent as the segment encountered a loss in fiscal 2021.

Automotive And Energy Gross Margin

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Tesla’s automotive sector is much more profitable than the energy sector when examined from the perspective of gross margin.

As seen in the chart above, Tesla recorded a gross margin of 26.5% in the automotive segment in fiscal 2022 and this ratio also had been quite consistent in the past several years.

On the other hand, Tesla’s energy segment gross margin has fluctuated quite significantly.

Despite incurring a loss in 2021, Tesla’s energy came back profitable in fiscal 2022 and recorded a gross margin of 7.4%, a significant milestone for the company.

U.S. And China Revenue

tesla-U.S.-and-China-revenue

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Tesla gets its revenue primarily from the United States.

As seen, the company earned a massive $41 billion in sales in the U.S. alone in fiscal 2022 and the revenue figure was way higher than any other country in the world.

More importantly, the U.S. revenue figure has increased tremendously in the past 3 years, illustrating the importance of the North American market to the company.

In terms of revenue generated in China, the figure clocked $18 billion in fiscal 2022, second only after the U.S., and has been on the rise since 2020.

In just 3 years, Tesla’s China revenue has almost tripled in numbers but was still far behind that of the U.S.

Therefore, the Chinese market is nearly as important as the U.S. market to Tesla.

U.S. And China Revenue In Percentage

tesla-U.S.-and-China-revenue-in-percentage

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In terms of revenue by region in percentage, the figures have been quite consistent for all countries.

For example, Tesla’s U.S. revenue share clocked 50% in fiscal 2022 and this figure has remained roughly the same since fiscal 2015.

However, for China, Tesla’s revenue share in this region has increased quite significantly since 2015.

Although the percentage of China’s revenue has risen to 22% as of fiscal 2022, it has remained the same in the past 3 years.

On the other hand, Tesla’s revenue from other regions has declined from 31% recorded in fiscal 2020 to 28% recorded in fiscal 2022.

In short, half of Tesla’s revenue came from the United States alone in fiscal 2022.

U.S. And China Revenue Growth Rates

tesla-U.S.-and-China-revenue-growth-rates

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Looking at just the results of the last 3 years, Tesla’s U.S. revenue grew the most and clocked a massive 69% in fiscal 2022.

On the other hand, Tesla’s China revenue growth has been on the decline in the last 3 years and clocked only 31% as of fiscal 2022, the lowest figure that has ever been recorded since 2020.

Conclusion

To recap, Tesla reported record revenue growth and has been a profitable company.

In addition, Tesla generates positive gross margins.

Therefore, Tesla is making money.

However, this trend applies to only the automotive segment.

Tesla’s energy segment has not been quite as successful as the automotive segment and revenue growth has not taken off yet.

Despite the unprofitable nature of the energy segment, I believe Tesla’s energy has vast potential and may soon be as big as if not bigger than the automotive segment.

References and Credits

1. All financial figures presented in this article were obtained and referenced from Tesla’s SEC filings, earnings releases, shareholders letters, etc, which are available in Tesla Investor Relations.

2. 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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