Analysis of Reportable Segments
Tesla Inc. operates in 2 segments: Automotive and Energy generation and storage.
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Segment Profit Margin
Tesla Inc., profit margin by reportable segment
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Automotive | |||||
| Energy generation and storage |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The segment profit margin for Automotive exhibited a declining trend over the five-year period. Initially strong at 26.91% in 2021, it decreased to 26.52% in 2022 before experiencing a more substantial decline to 18.21% in 2023. This downward trajectory continued into 2024 and 2025, reaching 16.91% and 16.20% respectively. Conversely, the segment profit margin for Energy generation and storage demonstrated a significant improvement throughout the observed timeframe.
- Automotive Segment
- The Automotive segment’s profit margin experienced a consistent decrease from 2021 to 2025. The decline suggests potential pressures on profitability within this segment, possibly stemming from increased competition, rising input costs, pricing adjustments, or a shift in sales mix. The rate of decline accelerated between 2022 and 2023, indicating a potentially intensifying challenge.
- Energy Generation and Storage Segment
- The Energy generation and storage segment underwent a dramatic transformation in profitability. Starting with a negative margin of -4.63% in 2021, the segment achieved positive margins in 2022, reaching 7.37%. This positive trend continued with substantial gains in subsequent years, culminating in a profit margin of 29.77% in 2025. This indicates successful improvements in operational efficiency, cost management, or increased demand for energy solutions.
The contrasting trends between the two segments suggest a potential strategic shift in profitability drivers. While the Automotive segment faces increasing challenges, the Energy generation and storage segment is emerging as a significant contributor to overall profitability. Further investigation into the factors driving these divergent trends is warranted.
Segment Profit Margin: Automotive
Tesla Inc.; Automotive; segment profit margin calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The automotive segment experienced fluctuating financial performance between 2021 and 2025. Revenues demonstrated substantial growth initially, followed by a decline. Gross profit mirrored this pattern, peaking in 2022 before decreasing in subsequent years. However, the segment profit margin exhibited a distinct downward trend throughout the period.
- Revenue Trend
- Revenues increased significantly from US$51.034 billion in 2021 to US$77.553 billion in 2022, representing a growth of approximately 52%. This growth continued, albeit at a slower pace, reaching US$90.738 billion in 2023. However, revenues then decreased to US$87.604 billion in 2024 and further to US$82.056 billion in 2025.
- Gross Profit Trend
- Gross profit increased from US$13.735 billion in 2021 to US$20.565 billion in 2022, aligning with the revenue growth. Gross profit peaked at US$20.565 billion in 2022, then decreased to US$16.519 billion in 2023, US$14.810 billion in 2024, and US$13.292 billion in 2025. The rate of decline in gross profit accelerated in the later years.
- Segment Profit Margin Trend
- The segment profit margin began at 26.91% in 2021 and remained relatively stable at 26.52% in 2022. A significant decline was observed in 2023, with the margin falling to 18.21%. This downward trend continued in 2024 (16.91%) and 2025 (16.20%). The segment profit margin decreased by approximately 10.71 percentage points over the five-year period.
The decreasing segment profit margin, despite initial revenue growth, suggests increasing costs or pricing pressures within the automotive segment. While revenues initially increased, the inability to maintain profitability levels indicates potential challenges in cost management or competitive dynamics. The continued decline in both gross profit and profit margin in the later years warrants further investigation.
Segment Profit Margin: Energy generation and storage
Tesla Inc.; Energy generation and storage; segment profit margin calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The Energy generation and storage segment demonstrated a significant improvement in financial performance between 2021 and 2025. Initially, the segment experienced a gross loss, but subsequently achieved substantial growth in both gross profit and revenue, leading to a consistently increasing segment profit margin.
- Gross Profit
- In 2021, the segment reported a gross profit of negative US$129 million. This figure increased substantially to US$288 million in 2022, and continued to rise significantly, reaching US$1,141 million in 2023. Further growth was observed in 2024, with gross profit reaching US$2,640 million, and culminating in US$3,802 million in 2025. This indicates a strong and accelerating trend of profitability within the segment.
- Revenues
- Revenues followed a similar upward trajectory, beginning at US$2,789 million in 2021. Revenue increased to US$3,909 million in 2022, then to US$6,035 million in 2023. The rate of revenue growth accelerated in subsequent years, reaching US$10,086 million in 2024 and US$12,771 million in 2025. This consistent revenue expansion supports the observed growth in gross profit.
- Segment Profit Margin
- The segment profit margin began at -4.63% in 2021, reflecting the gross loss experienced that year. A positive margin of 7.37% was achieved in 2022, and this margin expanded considerably to 18.91% in 2023. The trend of increasing profitability continued, with the segment profit margin reaching 26.17% in 2024 and 29.77% in 2025. This demonstrates a substantial and sustained improvement in the segment’s ability to convert revenue into profit.
The consistent growth in both gross profit and revenue, coupled with the expanding segment profit margin, suggests increasing operational efficiency and market demand for the Energy generation and storage offerings. The segment’s performance has transitioned from a loss-making position to a highly profitable one over the observed period.
Revenues
Tesla Inc., revenues by reportable segment
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Automotive | |||||
| Energy generation and storage | |||||
| Total |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Overall revenues demonstrate a pattern of growth followed by a stabilization and slight decline. Initial growth was substantial, but the rate of increase slowed in later periods. The automotive segment remains the primary revenue driver, though the energy generation and storage segment exhibits a consistent upward trajectory.
- Automotive Revenue
- Automotive revenue increased significantly from 2021 to 2022, growing from US$51.034 billion to US$77.553 billion. This growth continued into 2023, reaching US$90.738 billion. However, 2024 saw a slight decrease to US$87.604 billion, and this downward trend continued in 2025, with revenue falling to US$82.056 billion. This suggests a potential saturation or increased competition within the automotive market.
- Energy Generation and Storage Revenue
- Revenue from energy generation and storage exhibited consistent growth throughout the analyzed period. Starting at US$2.789 billion in 2021, it increased to US$3.909 billion in 2022, US$6.035 billion in 2023, US$10.086 billion in 2024, and further to US$12.771 billion in 2025. This indicates a strengthening position and increasing demand for products within this segment.
- Total Revenue
- Total revenue mirrored the initial growth observed in automotive revenue, increasing from US$53.823 billion in 2021 to US$81.462 billion in 2022 and peaking at US$96.773 billion in 2023. Growth slowed in 2024, with revenue reaching US$97.690 billion, and a slight decline was observed in 2025, with total revenue at US$94.827 billion. The stabilization and subsequent decrease in total revenue are largely attributable to the performance of the automotive segment.
- Segment Contribution
- The automotive segment consistently contributed the vast majority of total revenue throughout the period. While the energy generation and storage segment’s contribution increased in absolute terms, it remained a smaller portion of overall revenue. In 2021, automotive revenue represented approximately 94.8% of total revenue, while in 2025, it represented approximately 86.5%. This demonstrates a gradual, though still relatively small, shift in revenue composition.
Gross profit
Tesla Inc., gross profit by reportable segment
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Automotive | |||||
| Energy generation and storage | |||||
| Total |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Gross profit exhibited varied performance across reportable segments between 2021 and 2025. The Automotive segment, representing the largest portion of overall gross profit, initially demonstrated substantial growth, followed by a period of decline. The Energy generation and storage segment experienced a significant turnaround, moving from a loss to substantial gains over the analyzed period. Total gross profit mirrored the Automotive segment’s trajectory, showing initial expansion followed by stabilization and a slight decrease.
- Automotive Segment
- The Automotive segment’s gross profit increased notably from US$13,735 million in 2021 to US$20,565 million in 2022, indicating strong sales and potentially improved production efficiencies. However, gross profit then decreased to US$16,519 million in 2023, continued to US$14,810 million in 2024, and further declined to US$13,292 million in 2025. This suggests increasing competitive pressures, rising input costs, or a shift in sales mix towards lower-margin vehicles. The decline from 2022 to 2025 represents a reduction of approximately 35.4%.
- Energy Generation and Storage Segment
- The Energy generation and storage segment reported a loss of US$-129 million in 2021. This segment then experienced consistent growth, achieving a gross profit of US$288 million in 2022, US$1,141 million in 2023, US$2,640 million in 2024, and US$3,802 million in 2025. This positive trend indicates increasing demand for energy storage solutions and improved operational performance within this segment. The growth from 2022 to 2025 is substantial, representing an increase of approximately 1,221.5%.
- Total Gross Profit
- Total gross profit increased from US$13,606 million in 2021 to US$20,853 million in 2022, mirroring the growth in the Automotive segment. Gross profit remained relatively stable between 2023 and 2024 at US$17,660 million and US$17,450 million respectively, before decreasing slightly to US$17,094 million in 2025. The overall trend suggests a reliance on the Automotive segment for gross profit generation, with the Energy generation and storage segment increasingly contributing to overall profitability, but not yet offsetting the decline in Automotive gross profit.
The contrasting trends between the two segments highlight a potential shift in the company’s profitability drivers. While the Automotive segment remains the dominant contributor, the rapid growth of the Energy generation and storage segment suggests increasing diversification and potential for future growth. The recent decline in Automotive gross profit warrants further investigation to understand the underlying causes and potential mitigation strategies.