Tesla Inc. (TSLA) has grown rapidly into one of the world's largest all-electric vehicle companies through the sale of cars and pickup trucks in the U.S., Europe, and China. The automotive segment accounts for the vast majority of revenue at the Palo Alto-headquartered company, and the U.S. accounts for just under half of sales. Tesla faces growing competition from other major automakers who are developing and marketing electric vehicles, including General Motors Co. (GM), China-based Nio Inc. (NIO), and Volkswagen AG (VOW3), and Daimler AG (DAI), both headquartered in Germany.

Key Takeaways

  • Tesla makes, sells, and services all-electric vehicles in the U.S., Europe, and China. It also sells energy generation products.
  • The company gets the vast the majority of its revenue and profit from automotive sales.
  • Tesla is experiencing rapid growth in China.
  • The company has posted annual losses in each fiscal year since going public in 2010, but just posted its fifth consecutive quarter of profits in Q3 2020.
  • Tesla will be added to the S&P 500 before trading on Dec. 21, 2020.

Tesla Financials

Tesla has struggled to earn profits, reporting a loss in each of the last five fiscal years. However, the electric carmaker has now posted profits in each of the last five quarters, including three that have been affected by the economic impacts of the COVID-19 pandemic. The company said that, due to the pandemic, it temporarily suspended operations at each of its manufacturing facilities worldwide at some point during the first half of the year in order to comply with government requirements or accommodate the needs of its employees and suppliers. Since the first half of the year, Tesla has resumed operations at all of its manufacturing facilities, but impacts of the pandemic are still being felt in many parts of its business.

Tesla posted net income of $369 million in Q3 2020, which ended September 30, 2020. Net income rose 146.0% year over year (YOY), a huge milestone marking the fifth consecutive quarter of profits. Revenue for the quarter was $8.8 billion, up 39.2% from the year-ago quarter.

Just under half, or 48%, of that revenue was generated in the U.S., while China accounted for 20% of total revenue. Other countries across the globe accounted for the remaining 32%. Each of the above regional categories experienced growth in Q3 2020, but revenue from China grew the fastest, at a rate of 160.7% compared to the year-ago quarter.

Tesla Business Segments

Tesla operates through two main business segments: Automotive and Energy Generation and Storage. The company provides revenue and gross profit metrics for each segment, as we show below and in the pie charts above.

Automotive

Tesla's Automotive segment comprises the design, development, manufacturing, sales, as well as the leasing of electric vehicles and automotive regulatory credits. The segment, which accounts for 93% of total revenue and 99% of total gross profit, also includes non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, and vehicle insurance revenue. The segment posted gross profit of $2.0 billion in Q3 2020, up 85.1% compared to the same three-month period a year ago. Revenue rose 38.8% to $8.2 billion.

Energy Generation and Storage

The Energy Generation and Storage segment, which accounts for 7% of total revenue and 1% of total gross profit, includes the design, manufacture, installation, sales, and leasing of solar energy generation and energy storage products and related services. The segment posted gross profit of $21 million in Q3 2020, down 76.1% compared to the same quarter a year ago. Revenue for the segment rose 44.0% to $579 million.

Tesla Recent Developments

Tesla announced in early October its vehicle production and delivery results for Q3 2020. The automaker produced more than 145,000 vehicles and delivered more than 139,000.

Tesla became eligible for inclusion in the S&P 500 index after posting a fourth consecutive quarter of profitability according to generally accepted accounting principles (GAAP) in Q2 2020. The decision committee at Standard & Poor's (S&P) initially decided not to include it in the index in early September. However, Tesla announced a fifth consecutive quarter of GAAP profitability in Q3 2020, and on Nov. 16, 2020, the S&P decision committee announced that Tesla would be added to the index before trading began on Dec. 21, 2020. On Dec. 11, 2020, S&P announced it would be replacing Apartment Investment and Management Co. (AIV).

How Tesla Reports Diversity & Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Tesla and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Tesla releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether Tesla discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Tesla breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.

Tesla Diversity & Inclusiveness Reporting
  Race Gender Ability Veteran Status Sexual Orientation
Board of Directors        
C-Suite
 
       
General Management          
Employees