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Tesla Revenue Breakdown And Estimated Sales Growth

Tesla Model S at a car show. Source: Flickr

Tesla (NASDAQ:TSLA) is an American electric vehicle or EV company with operations scattering 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 is 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.

By 2030, Tesla will be approximately a $10 trillion company, with businesses ranging from EVs to renewable energy.

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 growth for fiscal 2021, 2022 and 2023 and what Tesla’s revenue will be like 3 years from now.

Let’s hit the ball now!

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 FY2020

Tesla revenue breakdown for FY2020

Based on the snapshot above, Tesla’s revenue is made up of the following segments as of fiscal 2020:

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 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 2021, 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 revenue soared to a record high as of fiscal 2020 at slightly more than $30 billion.

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

Between fiscal 2015 and 2020, Tesla’s sales grew at a compounded annual growth rate or CAGR of more than 50% to reach its current level of $32 billion.

By the end of fiscal 2021, Tesla’s annual revenue is projected to reach $44.5 billion.

In subsequent fiscal years, including 2022 and 2023, Tesla’s yearly revenue will reach $63 billion and $89 billion, respectively.

In short, Tesla’s sales growth has been extraordinary and will be even more massive going into the future.

Tesla’s Projected 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 2021, 2022 and 2023 came from the author’s own calculation.
* GM and Ford’s projected revenues for fiscal 2021 and 2022 came from Yahoo Finance.
* 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 is still far behind that of its peers, including General Motors and Ford Motors.

As seen in the chart, Tesla’s total sales in fiscal 2020 were only 1/4th of what GM and Ford each made in the same fiscal year.

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

From a comparison perspective, Tesla’s FY2020 $30 billion sales were still far behind that of GM and Ford.

Therefore, Tesla still has a long way to go before being on the same level as GM and Ford.

Even by fiscal 2022, Tesla’s revenue will not be half of what GM and Ford will make in the same fiscal year.

In short, Tesla’s growth has just got started and if you are not on board, you may miss the ride.

Tesla’s Total 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 2021, 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 automotive revenue made up the bulk of its total sales, at $27 billion in 2020.

Going forward, Tesla’s automotive revenue will still be the biggest revenue contributor to the company at $38 billion, $54 billion and $76 billion for fiscal 2021, 2022 and 2023, respectively.

On the other hand, both Tesla’s services and energy revenue ranked second place at $2.3 billion and $2.0 billion, respectively in fiscal 2020.

However, Tesla’s energy is expected to overtake the services sector by fiscal 2022 when Tesla’s solar roof is ready for mass-market adoption and the demand for home as well as commercial storage soars.

Going into fiscal 2023, Tesla’s energy sector is expected to contribute an even bigger slice of sales to the company at $6.7 billion annually.

When the world’s energy supplies are slowly switching to renewable energy, Tesla’s energy business will certainly benefit greatly from the trend.

Beyond fiscal 2025, Tesla’s energy business is expected to take off tremendously and may exceed that of its automotive sector by fiscal 2030.

Aside from selling energy storage and supply, Tesla will also be having a subscription-like model for its battery, including a swappable battery for its large customer base.

In short, Tesla’s energy sector will be another growth driver for the company in addition to the automotive segment.

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 2021, 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 percentage basis, Tesla’s automotive revenue makes up more than 80% of the company’s total sales.

However, Tesla’s automotive revenue used to be contributing more than 90% of the company’s total sales.

As Tesla’s other revenue streams such as energy and services increase over the years, the automotive sector revenue contribution slowly decreases and reached only 86% as of fiscal 2020.

Going into the future, Tesla’s automotive revenue contribution is projected to decline to only 85% by fiscal 2023.

At the same time, Tesla’s energy sector contribution is expected to rise to 8% of total sales by fiscal 2023.

Tesla’s service sector will also grow in tandem with that of the automotive segment but Tesla’s energy business should outgrow the services segment by fiscal 2022 given the vast potential of renewable energy.

For now, Tesla is directing all its resources on the automotive business.

Once the automotive business is on track and profitable, Tesla will use the profits generated from the automotive sector and invest them in the energy segment to further expand it.

What I can see so far is that Tesla has been on the right track.

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 2021, 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 28% in fiscal 2020 compared to the prior year.

In the same fiscal year, Tesla’s both automotive and energy revenues grew at about the same rate at 30%.

Among all sectors, Tesla’s services grew the least at only 3.6% in fiscal 2020 compared to the prior year.

However, Tesla’s services revenue grew at an average growth rate of more than 30% for the past 3 fiscal years.

Going forward, Tesla’s energy sector growth rates will dominate compared to other business segments and is estimated to grow 50% year on year in fiscal 2021, 2022 and 2023.

On the other hand, Tesla’s automotive and services will grow at an average growth rate per annum of around 40% in the next 3 years from fiscal 2021 to fiscal 2023.

In short, all Tesla’s business segments are projected to grow significantly in the next 3 years.

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 $12 billion in fiscal 2Q 2021, a record high 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

* TTM revenue is calculated by the author and is based on the sum of the quarterly data on a trailing 12-month or 4-quarter basis.

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.

On a TTM basis, Tesla’s revenue rose to a record high of $42 billion as of fiscal Q2 2021, an increase of more than 60% year on year.

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

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

All in all, Tesla emerges stronger year on year as seen from the increasing 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.

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 1Q 2019 onward, Tesla’s quarterly gross margin was seen rising and reached 24% as of Q2 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.

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.

Tesla’s vehicle margin clocked in at around 20% as of fiscal 1Q 2021 according to this article: Tesla’s Vehicle Margin Vs Nio and Xpeng.

Tesla’s TTM Gross Margin

Tesla TTM gross margin

Tesla TTM gross margin

* TTM gross margin is calculated by the author based on the sum of the quarterly data on a trailing 12-month or 4-quarter basis.

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 Q2, Tesla’s TTM gross margin ticked higher to 22%, a 1 ppt higher than the prior quarter.

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

Going forward, Tesla is projected to produce and deliver 750,000 vehicles by the end of fiscal 2021, a 50% growth year over year with respect to fiscal 2020.

Tesla will see further margin expansion when it cracks the 750,000 deliveries target by the end of fiscal 2021.

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

In fiscal Q2 2021, Tesla’s automotive sales revenue alone contributed $10 billion in sales to the company, a high 83% percentage.

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 Q2, none of Tesla’s other business segments has yet to cross the $1 billion revenue mark.

However, Tesla’s services revenue was getting close at about $951 million in sales as of 2Q 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 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 is expected 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.

The chart above shows Tesla’s revenue breakdown by segments but with automotive sales revenue excluded.

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 among the 3 segments.

In subsequent quarters, Tesla’s services segment continued to lead the race and reached $951 million on a quarterly basis in fiscal 2021 Q2.

During the same period, Tesla’s energy sector has been fast catching up in terms of revenue growth in 2020 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 2Q 2021 at $800 million of sales.

While Tesla’s automotive leasing revenue has been on a rise in the last few quarters, it only managed to reach $332 million on a quarterly basis in fiscal 2Q 2021.

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

As of fiscal 2Q 2021, Tesla’s energy revenue reached a massive $800 million, the highest the company has ever reported in any single quarter.

Tesla’s strong energy revenue in 2Q 2021 was driven mainly by the massive energy storage deployment which reached nearly 1.3GWh in the same quarter.

Year over year, Tesla’s energy storage deployment grew 200% in fiscal 2Q 2021.

Similarly, Tesla’s solar deployment also increased significantly to 85MW in 2Q 2021, a 215% increase from the same quarter a year ago.

Tesla’s services growth continued to outpace the rest of the business sectors, growing nearly 100% year on year in fiscal Q2 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.

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 Q2, Tesla’s sales from the United States alone reached as much as $5.2 billion, representing a YoY growth of nearly 70%.

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 other European countries contributed the 3rd largest revenue stream to Tesla in 2Q 2021 at $3.9 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 $2.9 billion of sales in fiscal 2021 2Q.

Year over year, Tesla grew its revenue in China by more than 100% in the 2nd 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 over 145% for the last 5 quarters.

The rising revenue in both the U.S. and China throughout fiscal 2021 indicates a strong demand for Tesla’s products, even during one of the worst pandemic outbreaks the world has seen.

Internationally, Tesla’s sales started to pick up again in fiscal 2021 when it reported nearly $4 billion of sales which includes the European and other regions of the world.

Year over year, Tesla grew its international revenue by more than 100% in Q2 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 using 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 Q2 2021, Tesla’s total revenue increased by a massive 15% 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 using 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 98% in fiscal 2021 2Q, driven primarily by strong vehicle delivery volumes and partly by other business segments, including energy and services.

Conclusion

There is no doubt that Tesla’s growth story will continue in the foreseeable future.

In fact, Tesla has only got started and there are so many areas that the company has not even touched on yet.

For example, Tesla’s automotive is only one segment that is seeing better results now but still has so much potential in the future.

On the other hand, Tesla’s solar has yet to reach the level of mass-market adoption seen in the automotive segment.

Additionally, Tesla will reportedly go for a subscription-liked business model which will include not only software such as autonomous driving but also hardware such as energy and battery leasing.

As of fiscal 2Q 2021, Tesla has sold nearly 2 million EVs on a cumulative basis and this has not included the user base from other business segments, including the energy sector.

Therefore, Tesla has a large user base and from the large pool of customers, the company can definitely further monetize by cross-selling other products.

Besides, this has yet to account for Tesla’s most important asset, its charging infrastructure in which the company can further cross-sell.

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

References and Credits

1. Financial figures in all charts in this article were obtained and referenced from Tesla’s quarterly and annual filings available in Tesla Investor Relationship.

2. Projected revenues for FY2021, 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.

{ 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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