Tesla has had an eventful few years, and from a financial standpoint, it’s hard to refute what the electric vehicle manufacturer has accomplished. With EVs at the helm, Tesla has also established a few key revenue streams that may provide an indication of where the company is headed.
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Above: A Tesla Model Y in front of a mural (Image: Casey Murphy / EVANNEX).
Tesla earned $12.6 billion in net income last year while generating $7.6 in free cash flow, as detailed in a recent report from The Motley Fool. The publication also points out that, crucially, Tesla reached those financials after reinvesting over $7 billion into its operations last year. The Motley Fool says that it has been good for analysts and investors to pay close attention to the automaker’s main business of EVs. However, Tesla’s other businesses may show promise, too.
“Analysts and investors have rightly focused on Tesla's core business thus far. But there's something else stock buyers should want to follow,” writes The Motley Fool’s Howard Smith. “[The] company's energy and services segments are growing much more quickly than vehicle sales and are becoming meaningful contributors to revenue.”
While $20.24 billion of Tesla’s revenue in Q4 came from the auto business, the company also made $1.7 billion in the “services and other” category. This category includes paid Supercharging, Tesla service and parts, used car sales and other ongoing services-related charges. This particular category marked 7.5 percent of Tesla’s full-year revenue in 2022, and it achieved record gross profits.
It’s noteworthy that Tesla is also piloting a program to open its Supercharger network to other EVs, currently available in select U.S. locations and in many areas of Europe. Tesla has over 43,000 Supercharger stalls worldwide and is constantly deploying new charging stations.
Tesla also generated $1.31 billion in revenue from “energy generation and storage” in Q4, a hugely growing industry, as well as $599 million and $467 million in auto leasing and regulatory credits, respectively. Despite the energy business not generating as much revenue as some analysts and investors had hoped, its growth is clear and likely to continue increasing in the coming years.
You can see a helpful chart from The Motley Fool on Tesla’s revenue streams in the fourth quarter of 2022 here.
Smith points out the obvious key to Tesla as being its automotive business. However, with a $3.5 billion expansion on the way for Giga Nevada’s battery cell, battery pack and energy module production (and the Semi), this segment may be worth watching closely. And while no one can say exactly where Tesla’s stock will go, some of the company’s smaller segments could be increasingly significant revenue streams for the company in the next several years.
Source: The Motley Fool
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