How Does Tesla Make Money?

In 2021, Tesla generated $53.8 billion in revenues. Tesla’s business model primarily relies on automotive sales, $47.2 billion (almost 88% of the total revenues); services/others followed with $3.8 billion, energy generation and storage generated about $2.8 billion in revenues, and automotive leasing generated $1.46 billion.  

Revenues breakdown2021%
Automotive sales$44.12B81.98%
Automotive regulatory credits$1.46B2.72%
Automotive leasing$1.64B3.05%
Services and other$3.8B7.06%
Energy generation and storage segment revenue$2.79B5.18%
Total Revenues$53.8B
Tesla Revenue Breakdown. Analysis by FourWeekMBA.
Founded in 2003, by Eberhard and Tarpenning, eventually, the initial co-founders left the company, and by 2004, Musk first became the main investor, and thereafter, by 2008, he took over as CEO of the company. Tesla would go through many near-death experiences, until 2018. And yet, by 2021, Tesla became a trillion-dollar company.
Tesla is vertically integrated. Therefore, the company runs and operates the Tesla’s plants where cars are manufactured and the Gigafactory which produces the battery packs and stationary storage systems for its electric vehicles, which are sold via direct channels like the Tesla online store and the Tesla physical stores.
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.
A real-time insurance business model enables Tesla to build its own insurance arm, by dynamically adjusting the premiums, based on real-time driving behavior. Reduced insurance premiums hooked with the leasing arm, enable Tesla to scale its demand side of the business.

Read Next: Tesla Business Model, Tesla Mission Statement.

Read Also: Business Model.

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