How Does Tesla Make Money?

Tesla, formally known as Tesla, Inc. is an American company founded on the 1st of July 2003 that is owned by Elon Musk who is the largest shareholder in the company. Tesla, Inc., co-founded by Martin Eberhard and Marc Tarpenning as Tesla Motors is very popular worldwide for the production and supply of electric vehicles and clean energy. Tesla mainly provides its services in the U.S., Europe, Australia, New Zealand, East Asia, and the Middle East with over five hundred retail stores, galleries, and services centers in these areas. Tesla, Inc. is headquarters in Palo Alto, California, U.S., and is the parent company of Deep Scale, Tesla Energy, and Tesla Grohmann Automation. Tesla’s revenue for 2020 is estimated to be around $31.5 billion and is projected to grow around $44.5 billion at the end of the financial year 2021. Let’s know more about How does Tesla make money?

How does Tesla make money?

Tesla after its founding in 2003 has become a renowned company worldwide that is used synonymously with electric vehicles and clean energy. In its short history of eighteen years, Tesla has established itself as the world’s largest all-electric vehicle manufacturer that is rapidly growing throughout the world. The main source of revenue for Tesla is the sale of its electric vehicles. Research shows that Tesla earns 81% of its revenue through its automotive and the rest through the supply and storage of clean energy, regulatory credits, and other automotive services. 

The main reason for the success of Tesla is not for the invention of electric vehicles (founded by Gustave Trouvé in 1881) but for their innovation to make these electric vehicles cooler. The Roadster was the first electric vehicle that was unveiled by Tesla in 2006 that became an instant hit among the masses, bringing a surge of change in the auto industry and establishing one of the most popular and go-to electric automobile brands of this era. Although the production of the Roadster has ceased since 2012, the company has delivered many new vehicles such as the Tesla Model S, Model X, Model 3, and the latest Tesla Model Y have all received fame from many customers worldwide. 

Tesla also makes its revenue through the production and storage of clean energy that accounts for almost 5% of Tesla’s total annual revenue. Tesla also manufacturers batteries to store grid power such as the Powerwall, Powerpack, and Megapack that can be used at homes and offices when power sources are not active. Aside from the sales of automobiles, providing services such as vehicle servicing, insurance, software updates and upgrades, and energy supply, Tesla also earns its revenue through unconventional means such as the sale of Bitcoins. Research shows that Tesla has earned a profit of $101 million through the sale of Bitcoins as of April 2021. 

What is Tesla’s main source of revenue?

The main source of Tesla’s revenue is the sale of its electric vehicles and different auto services. This accounts for almost 89.6 % of the total annual revenue of Tesla (81% sales automotive sales and 8.6% from auto services). The automotive segment of Tesla comprises the sale, development, design, manufacturing, and leasing of electric vehicles. Although Tesla and electric cars are revered simultaneously, Tesla is not the inventor of electric vehicles but is the company who gave revolutionized electric vehicles in this era. The concept of electric vehicles dates back to 1881 and Tesla’s first electric car, The Roadster was launched in 2006 that has changed the face of the electric vehicle industry with more and more people switching from conventional petrol and diesel vehicles to these electric vehicles every year. This segment of Tesla has earned Tesla an annual profit of $6.6 billion and a revenue of $31.5 billion for the financial year 2020.

Even though Tesla does not offer a diverse variety of e-vehicles with only four models that customers can choose from, the Model S, Model X, Model 3, and the Model Y, it is able to generate almost four-fifths of the total revenue. Since only authorized personnel can repair and maintain Tesla vehicles, the company has monopolized auto services and other related services for its vehicles which earns Tesla around $893 million in revenue. 

What is Tesla Energy?

Tesla Energy is a subsidiary company of Tesla, Inc. that develops, manufactures, and sells PV systems, battery energy storage products, and other related products that provide clean energy for residential, commercial, and industrial use. This sector of Tesla accounts for almost 5% of the total annual revenue. Tesla’s Powerwall, Powerpack, and Megapack batteries are used to store grid power that can subsequently be used at homes and offices when other power sources are unavailable. This Tesla subsidiary also manufactures and installs solar panels, solar roofs, and its latest product the Tesla solar inverter. This company was founded by Elon Musk in 2015 and since then has been a successful Tesla subsidiary earning a profit of $18 million and total revenue of $2 billion for the financial year 2020. 

Which products and services do Tesla provide?

Although Tesla is a global and renowned company that is synonymous with electric vehicles and clean energy, the products that it offers are rather limited. Tesla only offers four models of its vehicles that the customers can choose from which are the Tesla Model S, released in 2012, the Tesla Model X, released in 2015, the Tesla Model 3, released in 2017, and its latest Tesla Model Y, released in 2020. Tesla has announced its future products that include the Tesla Roadster (second generation), the Tesla Semi, and the Tesla Cybertruck that would allow greater variability and options to its customers. The Tesla automotive sector accounts for almost 80% of the total revenue of Tesla.

Tesla also provides other services such as vehicle servicing, charging, insurance, software upgrades, and improved connectivity accounting for almost 9% of the total Tesla revenue that equates to an estimated $900 million. Tesla has also proposed to expand its services with the inclusion of autopilot services as a subscription, portable car Wi-Fi services, and the Tesla Network that is a proposed ridesharing system. 

To know more about these services, click on the following: 

vehicle servicing, charging, insurance, software upgrades, and improved connectivity.


Tesla, as one of the largest suppliers of electric vehicles and clean energy in the United States, is one of the leading industries in this sector globally. The company has become synonymous with electric vehicles that are preferred by many clients who want to shift from fuel-based vehicles to electric vehicles. These vehicles Have become so popular globally that only the sale of these electric vehicles accounts for four-fifth of Tesla’s annual revenue. In this short history of Tesla, the company has been able to revolutionize the electric vehicle industry with not many companies being able to achieve the level of fame and recognition that Tesla has. However, the company has not stopped revolutionizing the electric vehicle industry, Tesla’s CEO Elon Musk is also planning to revolutionize the robotics industry with the Tesla Bot. Thus, it is not farfetched to say that Tesla has become the modern pioneer of technology. 

Frequently Asked Questions 
  1. How can I charge my Tesla car?

Since Tesla cars run on electricity and not on conventional fuel, they require special charging stations to do so. Tesla at home can be charged using the wall connector which needs to be installed at home after which it offers superfast charging with a mileage of 44 miles per hour of charge. Tesla vehicles at home can be also be charged using the mobile connector and adaptor which does not require any installation and can be directly used with the standard 3-point 120V outlet. 

           On the other hand, customers can charge their Tesla on the road through Tesla’s supercharger network and the destination charging location network. The Tesla Supercharger can be used to charge the car for up to 200 miles for every 15 minutes of charge. These chargers are located at minor routes and the destination chargers can be found at popular hotels, restaurants, resorts, and other such places. Conveniently, the location of these chargers can be found using the Tesla interface of the car. 

Link to an article illustrating more about the charging options:

  1. Where are Tesla service centers located?

There are almost 600 Tesla service centers that can be found in those markets where Tesla is the major electric vehicle supplier. These markets include the U.S., Europe, Australia, the Middle East, New Zealand, and East Asian countries. The Tesla vehicles can only be worked on and serviced by authorized Tesla employees as replacement parts are not accessible to third-party servicemen. Tesla first gives remote diagnosis and repair for the problem but if it is not possible, the customers are referred to a local Tesla-owned service center or a mobile technician is dispatched. Since the company has created a sort of monopoly for the servicing and repair of its vehicles, it accounts for almost 9% of the total revenue of the company.

Link to an article listing the location of all Tesla service centers in the U.S.

How Does Tesla Make Money?

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