Is Tesla Profitable Yet In 2024, And Has It Ever Made A Profit?

The U.S. car market is saturated with established automakers, but one such company that stands out from the rest is the electric car maker Tesla. But as macroeconomics strikes the US car market in 2023, it is a question of many: Is Tesla Profitable yet and has it ever made a profit?

Is Tesla Profitable Yet And Has It Ever Made A Profit

Martin Eberhard and Marc Tarpenning founded the company as an electric car in 2003.

In 2008, Tesla released its first electric car, named Roadster, and after that, the company came up with a lot of models gaining popularity in the market.

However, the profitability of Tesla still remains a question that needs to be solved. So, to know how profitable Tesla is, keep reading this article!

In this guide, we’ve collected data on how Tesla became profitable, and is it really profitable in 2024.


How Does Tesla Make Money?

Tesla operates through two business models: automotive and energy generation and storage. These two business segments also make the major revenue source of Tesla.

1. Automotive

Tesla’s automotive segment comprises the design, development, manufacturing, sales, and leasing of electric vehicles.

This business segment accounts for 95% of the total revenue and all of the company’s gross profit. It posted a gross profit of $13.7 billion in 2021, up 107.7% compared to the previous year.

2. Energy Generation And Storage

Energy generation and storage only account for 5% of total revenue, including design, sales, manufacture, and leasing of solar energy generation and energy storage products and related services.

The segment posted a gross loss of $129 million in 2021, which was a significant decline from the gross profit of $18 million reported in 2020.


Is Tesla Profitable Yet And Has It Ever Made A Profit?

It might have taken you by surprise that the tech giant Tesla didn’t start by striking it rich. This has made many people think about whether Tesla has ever made a profit.

Tesla started its journey in 2003 but the journey of its profit began from 2017 to 2022. During this time, Tesla’s profit increased by 47%.

This is the time when tesla made a profit, leaving every other company stunned. The company went from a net loss of $2 billion in 2017 to an impressive net income of almost $13 billion in 2022.

This proved that businesses could scale up their manufacturing capacities, resulting in positive earnings. Therefore, this was the time when Tesla earned a profit of $81.46 billion.

However, 2023 proved to be a bad year for the company. It kept splashing its prices to spur demand as the customers were suffering the pressure of high inflation and rising interest rates.

In 2023, the cost to manufacture and sell $78.5 billion worth of electric vehicles was $65.1 billion, which left the company with $13.4 billion in gross profit.

Similarly, manufacturing and selling $67.2 billion worth of vehicles cost $49.6 billion in 2022, leaving a gross profit of $17.6 billion.

But when we compare the gross profit of both years, we come with a gross profit of 26.2%, which declined by 17.1% in 2023, highlighting the impact of Tesla’s price cut.

According to the analyst, Teslas’s earnings for 2024 are below the earnings of 2023’s level, signaling another year of negative growth.

YearProfitNet loss/Income
2022$81.46 billion$12.55 billion
2023$96.77 billion$14.99 billion

How Tesla Became Profitable?

How Tesla Became Profitable

Tesla’s success and profitability in the industry are remarkable, but it didn’t start as profit profit-earning company. It took Tesla many years to become what it is now.

Here’s a breakdown explaining how Tesla became profitable:

Martin Eberhard and Marc Tarpeneing founded Tesla Motors in 2003. In 2004, Elon Musk joined the company and became the highest shareholder of the company, with $6.35 million in investments.

Later in the year 2004, Tesla Serie A Funding ended with $7.5 million raised. Then in 2007, Tesla Motors conducted its first initial public offering, which saw a raise of $226.1 million.

But the global financial crisis hit, the world was struggling, and Tesla was no exception. However, Elon Musk managed to secure the US Department of Energy’s Backing for a loan facility agreement worth $465 million.

The loan was paid back in 2013, ahead of its repayment scheduled time. In 2014, Tesla entered a new market, China, and reported significant results in addition to the more established regions of the USA, Canada, and Europe.

Car models like Model S generated more profit in comparison to the previous models. This stability and profitability provided a strong ground for experimenting with new models like Model 3.

Then, the years 2015-2017 were the years of rapid expansion, which was a result of strategic partnerships, successful entry into global markets, and increased revenue streams.

Moreover, the success of models like Model S and the EV sedan line Model 3 also contributed to the broader profit margins.

Tesla reported its first full-year profit in 2020 of $720 million, contrary to the loss of $862 million in 2019.

In the last three months of 2020, Tesla made $270 million, which is an increase of $105 million in 2019. This surge in profit waved a green flag to the company for portability. This is how and when Tesla becomes profitable.


How Much Profit Does Tesla Make On Each EV?

Tesla was making tons of money until the storm of high inflation rates and high interest rates hit the company which was in 2023.

As we discussed, the company’s gross profit declined by 17.1% in 2023, and the last three months of 2023 also didn’t show any shining light on Tesla.

In the last three months of 2023, the sales only went up 3%, which is a drop in the ocean. The average production cost per electric vehicle rolled in at just under $36,680.

This makes the average profit margin of $8,279 per car in 2023, compared to $9580 in 2022 and over $6,028 in 2021.


Is Tesla Stock A Good Buy?

The price cut of Tesla has even continued in the early stages of 2024, which has left investors in a predicament to buy Tesla stocks or not.


Conclusion

The above-mentioned data depicts that Tesla is a company that didn’t start rich and came a long way through hard work.

It expanded in the markets of China and grew rapidly. The time from 2017-2022 was years of growth and profit for Tesla.

However, when the customers were struck with high inflation and high-interest rates, the company also adapted. But resulted in impacting the company negatively.

However, it is not the end of the world. Tesla came through a tough time to become a giant tech company; it will surely adopt strong strategies to stand back on its profitable grounds.

Also, we hope this article will help you in making an informed decision if you are thinking of owning a Tesla Charging Station franchise.


FAQs

Does Tesla have a strong future?

Despite experiencing negative growth in 2023, some investors estimate that Tesla’s growth beyond 2024 is expected to surpass all of the Magnificent Seven other than Niveda Group.

What is the net worth of Tesla?

Tesla’s market capital is valued at $558.42 billion as of 2024.

Will Tesla ever surpass Apple?

According to some experts, Tesla can become the most valuable company in the world, surpassing Apple and Aramco combined, as long as it operates well over the next five years.

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