Tesla, the electric vehicle (EV) pioneer led by Elon Musk, has captivated the world with its innovations and disruptive technologies. Beyond its EV cars and futuristic ambitions, Tesla's success is underpinned by a multi-faceted revenue model that extends beyond vehicle sales. With $96.8 billion in revenues for FY (Full Year) 2023, let’s break down the main ways Tesla makes money.
Automotive Sales: $78.5 billion (81%)
By far Tesla’s revenue stream is from the sale of its electric vehicles. With a range of models catering to different market segments, from the mass-market Model 3 to the luxury Model S and Model X, Tesla has carved out a significant share of the EV market. The company's vehicles are known for their performance, range, and cutting-edge technology, attracting a loyal customer base and driving robust sales pipeline.
Services: $8.3 billion (9%)
Income through its software and services ecosystem. The company leverages over-the-air software updates to continuously enhance the capabilities and performance of its vehicles, offering features like Autopilot, Full Self-Driving (FSD), and entertainment options. Additionally, Tesla monetises its supercharger network by charging fees for access to its fast-charging infrastructure, providing added convenience for EV owners.
Energy Generation and Storage: $6.0 billion (6%)
Tesla generates revenue through its energy generation and storage business. Through products like solar panels, solar roofs, and energy storage solutions like the Powerwall and Powerpack, Tesla aims to revolutionise the way the world produces, stores, and consumes energy. By harnessing renewable energy sources and enabling grid independence, Tesla's energy products offer consumers sustainable and cost-effective alternatives to traditional energy sources.
Leasing: $2.1 billion (2%)
Tesla has ventured into new revenue streams such as insurance and vehicle leasing, expanding its offerings to provide end-to-end solutions for customers. With a relentless focus on innovation and sustainability, Tesla continues to push the boundaries of what's possible in the automotive and energy industries, driving revenue growth and cementing its position as a leader in the transition to a sustainable future.
Regulatory Credits: $1.7 billion (2%)
Revenue through regulatory credits, whereby it sells emissions credits to other automakers to help them meet regulatory requirements for reducing greenhouse gas emissions. These credits have become a significant source of income for Tesla, particularly as governments around the world implement stricter emissions standards and incentivise the adoption of electric vehicles.
Tesla's diverse and growing revenue streams underscore its status as a compelling investment case in the tech, automotive and energy sectors. By innovating across multiple market segments, Tesla has established itself as a disruptor with staying power. As the world increasingly embraces sustainability and renewable energy, Tesla's revenue model positions it well to capitalise on evolving market trends and continue driving growth in the years ahead.
Where can I invest in Tesla?
Tesla Inc. is listed on the NASDAQ - the US stock exchange, based in New York. For investors wanting to buy Tesla stock, you’ll need to use an investment platform that offers access to US-based stocks.
All of the providers listed on our stocks and shares investment platform comparison page and Stocks and Shares ISA comparison page, offer investors with the ability to buy and sell Tesla shares. If you want to invest in Tesla via an ETF (Exchange Traded Fund), instead of buying the stock individually, you can find a comparison of some of the best platforms for ETF investing.
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