Profitability Of Tesla
Revenue is the amount of money that a company earns. The earnings of the company. In the same chart, you can see the future projections of the estimated revenue of Tesla. In the chart, you can also see the breakdown. Red shows the revenue from car sales and automotive. Orange is for the revenue from selling energy products. Products like Tesla Solar Roof and Power Walls. And Yellow shows the revenue from Servicing.
Around 80% of the company’s revenue is from the sales of Tesla cars. If we compare this with a company like General Motors. The revenue of General Motors, that Tesla is lagging. In terms of revenue generation, Tesla is yet to reach the levels at which it can compete with the other car companies. But you can see it grow on the chart.
Tesla is catching up with them fast. In the future, it’s possible that Tesla would overtake companies like GM and Ford. Interestingly, the money earned by Tesla is less than the money spent by Tesla. You’d wonder how this could be possible. Tesla has a nice profit margin. The cost to manufacture one car, allows it to get profit on sale at a 30% profit margin.
On what is the money spent? The simple answer to it is on Research and Development. Tesla is spending billions of dollars on researching and developing good technology. For this exact reason, Tesla had been a loss-making company for many years, up till 2019. 2020 was the first year when Tesla made a net profit. And do you know what’s more interesting? While the other car manufacturing companies spend a lot of money on advertising.
