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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Automotive | |||||
| Energy generation and storage |
Based on: 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), 10-K (reporting date: 2020-12-31).
- Automotive Segment Profit Margin
- The automotive segment's profit margin exhibited an increasing trend from 22.38% in 2020 to a peak of 26.91% in 2021. This was followed by a slight decline to 26.52% in 2022. Subsequently, there was a notable decrease in profitability, with margins dropping to 18.21% in 2023 and further declining to 16.91% in 2024. Overall, this indicates a period of strong profitability early on, succeeded by a significant reduction in profit margins in the most recent years.
- Energy Generation and Storage Segment Profit Margin
- This segment showed a contrasting pattern with an initial low profit margin of 0.9% in 2020, which then deteriorated into a negative margin of -4.63% in 2021, indicating losses. However, starting in 2022, the segment experienced a recovery trend with profit margins increasing to 7.37%, followed by a substantial rise to 18.91% in 2023 and further to 26.17% in 2024. This progression highlights a turnaround from early losses to robust profitability over the later periods.
- Comparative Insights
- While the automotive segment's profit margin peaked early and declined thereafter, the energy generation and storage segment showed initial volatility with losses and then sustained positive growth in profitability. By 2024, the energy segment's profit margin surpassed the automotive segment's margin, signaling a shift in the relative profitability of these business areas. This could reflect increasing efficiencies, market demand, or strategic shifts within the energy segment, contrasting with challenges or margin pressures in the automotive domain.
Segment Profit Margin: Automotive
Tesla Inc.; Automotive; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The financial data indicates substantial growth in revenues within the automotive segment over the analyzed periods, with revenues rising from approximately $29.5 billion in 2020 to a peak of over $90.7 billion in 2023, followed by a slight decrease to approximately $87.6 billion in 2024. This demonstrates an overall positive growth trend in sales, albeit with a recent marginal decline.
Gross profit shows a marked increase from about $6.6 billion in 2020 to a maximum of around $20.6 billion in 2022, indicating a strong expansion in profit generation capacity during the early years. However, gross profit declined notably in the subsequent years, dropping to roughly $16.5 billion in 2023 and further to approximately $14.8 billion in 2024. This trend suggests challenges in maintaining higher gross profit levels relative to previous peak performance.
The segment profit margin percentage presents a fluctuating pattern, starting at 22.38% in 2020 and reaching a high point near 26.91% in 2021. It remained relatively stable at 26.52% in 2022 before experiencing a considerable decline to 18.21% in 2023 and further to 16.91% in 2024. This decline indicates decreasing profitability relative to revenues despite the earlier strength, suggesting possible increases in costs or pressure on pricing.
- Revenue Trends
- Consistent growth observed until 2023, followed by a minor contraction in 2024.
- Gross Profit Trends
- Strong growth through 2022, with a subsequent drop over the following two years.
- Segment Profit Margin Trends
- Initial improvement and stability, then a noticeable decline beginning in 2023.
- Overall Analysis
- The data reflects a growth phase in the automotive segment through 2022, with revenues and gross profit increasing significantly. However, starting in 2023, there is evidence of margin compression and a decrease in gross profit despite continued relatively high revenues. This may indicate rising costs, pricing pressures, or operational challenges affecting profitability.
Segment Profit Margin: Energy generation and storage
Tesla Inc.; Energy generation and storage; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The analysis of the annual Energy generation and storage segment reveals significant growth and improvement over the reported periods. Revenue figures demonstrate a consistent and robust upward trend, increasing from approximately $1.99 billion in 2020 to over $10 billion by the end of 2024. This indicates strong market expansion and growing demand within the segment.
Gross profit shows notable fluctuations but an overall positive trajectory. Initially, gross profit was modestly positive at $18 million in 2020 but declined sharply to a negative $129 million in 2021, suggesting challenges or increased costs during that year. However, from 2022 onwards, gross profit recovered impressively, reaching $288 million and accelerating to $1.14 billion in 2023, then more than doubling to $2.64 billion in 2024. This turnaround points to improved operational efficiency and cost management, alongside revenue growth.
The segment profit margin further emphasizes this trend of operational improvement. Starting from a minimal positive margin of 0.9% in 2020, the margin dipped below zero to -4.63% in 2021, reflecting the gross profit loss and potential operational difficulties. Subsequently, profitability returned and expanded substantially, with margins climbing to 7.37% in 2022, 18.91% in 2023, and reaching 26.17% in 2024. The increasing margin underscores enhanced profitability and efficient cost control within the segment.
- Revenue Growth
- Steady and significant increase each year, reaching over $10 billion by 2024.
- Gross Profit Fluctuation and Recovery
- Initial loss in 2021 reversed into a strong profit growth trajectory through 2024.
- Profit Margin Improvement
- From near breakeven and negative performance to robust profitability exceeding 26% margin by 2024.
- Operational Insights
- The improvement in profit and margins suggests effective scaling and cost control measures implemented after 2021 challenges.
Overall, the Energy generation and storage segment exhibited a pattern of initial volatility followed by sustained and accelerating growth in both revenue and profitability, indicative of increasing operational maturity and market strength in the analyzed period.
Revenues
Tesla Inc., revenues by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Automotive | |||||
| Energy generation and storage | |||||
| Total |
Based on: 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), 10-K (reporting date: 2020-12-31).
The data reveals a consistent upward trajectory in revenues across all reportable segments over the five-year period. Notably, the automotive segment demonstrates significant growth, expanding from approximately $29.5 billion in 2020 to a peak of around $90.7 billion in 2023 before experiencing a slight decline to about $87.6 billion in 2024. Despite this recent dip, the automotive segment maintains a substantially higher revenue level compared to the starting point in 2020.
The energy generation and storage segment exhibits a strong and continuous increase throughout the entire period, starting at roughly $2.0 billion in 2020 and more than quintupling to over $10.0 billion by the end of 2024. This growth rate is notably robust and outpaces the relative growth seen in the automotive segment, reflecting a rapidly expanding business area.
Total revenues mirror the growth trends observed in the individual segments, rising steadily from about $31.5 billion in 2020 to nearly $97.7 billion in 2023, with a marginal increase to approximately $97.7 billion in 2024. The slower growth in total revenue during the last year reflects the decline in the automotive segment, which is partially offset by continued expansion in energy generation and storage.
- Automotive Segment
- Revenue increased substantially from 2020 to 2023, with a growth of over 200%. The slight decrease in 2024 suggests potential market challenges or changing demand dynamics.
- Energy Generation and Storage
- Displays the strongest growth trend, increasing more than fivefold over five years, indicating rapid expansion and rising importance within the overall business structure.
- Total Revenue
- Shows consistent and strong growth aligned with segment trends, with a slight plateau in the final year due to automotive revenue decline partially offset by energy segment growth.
Gross profit
Tesla Inc., gross profit by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Automotive | |||||
| Energy generation and storage | |||||
| Total |
Based on: 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), 10-K (reporting date: 2020-12-31).
The gross profit data across the reportable segments shows distinct patterns and trends over the five-year period.
- Automotive Segment
- The automotive segment exhibited a strong upward trend from 2020 to 2022, increasing from $6,612 million in 2020 to a peak of $20,565 million in 2022. However, in the subsequent years, there was a noticeable decline, with gross profit falling to $16,519 million in 2023 and further to $14,810 million in 2024. This represents a reduction of approximately 28% from the peak in 2022 to 2024, indicating potential challenges or changes in the automotive market or cost structure affecting profitability.
- Energy Generation and Storage Segment
- The energy generation and storage segment demonstrated more volatility over the period. Starting from a marginal positive gross profit of $18 million in 2020, it recorded a negative gross profit of $129 million in 2021. This was followed by a significant recovery and growth in the subsequent years, reaching $288 million in 2022, then surging to $1,141 million in 2023 and further to $2,640 million in 2024. The rapid increase in gross profit in this segment suggests improved operational efficiency, increased sales, or product mix favorable to profitability in recent years.
- Total Gross Profit
- The total gross profit combines the effects observed in both segments. It shows an overall increasing trend from $6,630 million in 2020 to a peak of $20,853 million in 2022. Following this peak, total gross profit declined to $17,660 million in 2023 but slightly rebounded to $17,450 million in 2024. The decline in total gross profit after 2022 is primarily attributable to the automotive segment's decrease, partially offset by strong gains in the energy generation and storage segment. This shift in segment contributions indicates a changing dynamic in the company's gross profit sources.