Tesla Q3 2024: Navigating Margin Pressure and Energy Growth
A look at Tesla's Q3 2024 financials, examining automotive margin trends and the emerging energy storage business.
Tesla Q3 2024: Margins Stabilize as Energy Segment Shines
Tesla reported Q3 2024 revenue of $25.2 billion, with automotive revenue facing pricing pressure while the energy generation and storage segment posted record results.
Revenue Composition
Tesla's revenue breaks down across several categories:
- **Automotive Sales**: $20.0 billion
- **Automotive Regulatory Credits**: $739 million
- **Energy Generation and Storage**: $2.4 billion (record)
- **Services and Other**: $2.0 billion
The energy segment deserves attention. At $2.4 billion quarterly revenue with approximately 30% gross margin, it's becoming a meaningful contributor to the overall business.
Automotive Margin Analysis
The key metric investors watch closely:
- **Automotive gross margin (ex-credits)**: 17.1%
- Compared to Q3 2023: 18.7%
- Compared to Q3 2022: 27.9%
Margin pressure came from several factors:
- Price reductions to maintain demand
- Model refresh costs and production ramp inefficiencies
- Higher raw material costs (though improving)
- Increased competition in key markets
Management indicated the margin floor is likely around current levels, with improvements expected as new models and manufacturing efficiencies take hold.
Delivery and Production
- Vehicles produced: 469,796
- Vehicles delivered: 462,890
- Production slightly ahead of deliveries (inventory build)
Model Y continues to dominate sales, while Cybertruck production ramps. The next-generation affordable vehicle platform remains a key focus for volume growth.
Energy Business Momentum
The energy storage segment deployed 6.9 GWh in Q3, up from 4.0 GWh in Q3 2023. Key developments:
- Megapack demand exceeds current production capacity
- Lathrop factory expansion underway
- Shanghai Megapack factory construction progressing
- Utility-scale storage becoming a significant market
This segment may become Tesla's highest-margin business over time, with less competition than automotive.
Cash and Capital
- Free cash flow: $2.7 billion
- Cash position: $33.6 billion
- Capital expenditure guidance: $11 billion for full year
Tesla maintains substantial financial flexibility for R&D, capacity expansion, and potential new initiatives.
Visualizing Tesla's Diversification
A Sankey diagram of Tesla's income statement shows the company's evolution from a pure-play EV maker. Tracing the revenue flows reveals how automotive sales, energy, and services each contribute to gross profit, with the energy segment's growing importance becoming visually apparent quarter over quarter.
Visualize TSLA's Financial Statements
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